While Cingular (er,
AT&T, but you know what we mean)
couldn't seem prouder of its
iPhone exclusivity, apparently Apple's first choice was
Verizon, but the two companies couldn't agree on a deal that worked for both companies. "We said no." Said Jim Gerace, a VZW VP. "We have nothing bad to say about the Apple iPhone. We just couldn't reach a deal that was mutually beneficial." Talks began as far back as two years ago, but Apple's demands were steep. They also give us an idea of what exactly is behind the Apple / Cingular agreement: Apple wanted a percentage of monthly service fees, control over distribution that would limit iPhone sales to Apple and Verizon stores, and even some control over service and support for iPhone customers. "They would have been stepping in between us and our customers to the point where we would have almost had to take a back seat ... on hardware and service support," say Gerace. Cingular doesn't quite see it that way, so perhaps Apple changed its conditions a bit when it started courting Cingy. Says Mark Siegel, a Cingular spokesman, "I don't want to leave the impression that these (iPhone) customers are not ours. They are." Mark also mentioned that Cingular would field calls related to wireless service, and that "We think this is a win for Apple, and it is a win for Cingular." Whether consumers -- who would have presumably had a fair shot at an EV-DO iPhone with Verizon as a service provider -- will win in the end is yet to be seen.
Reader Comments (Page 1 of 2)
iHate @ Jan 29th 2007 11:13AM
Who would have known that Apple and its fanboys could be pushy?
rip @ Jan 29th 2007 12:09PM
Yeah, because those Apple fanboys are ALWAYS involved in Apple's high level corporate negotiations... :P
Gadget Chick @ Jan 29th 2007 11:14AM
i'm really glad the iphone didn't end up on verizon,bad customer service, stupid proprietary software, bad phone reception...must i go on.
Aaron @ Jan 29th 2007 11:15AM
What probably happened is Verizon wanted to control a lot more than Apple wanted them to. Verizon is notoriously greedy. I have no doubt they had grand plans of crippling the hell out of the iPhone in order to charge their users to get similar Verizon-branded functionality back. I'm not an Apple fan, but hey, good for them if they stuck up for their product and their goals.
Michael Chastain @ Jan 29th 2007 4:35PM
"Verizon is notoriously greedy. I have no doubt they had grand plans of crippling the hell out of the iPhone in order to charge their users to get similar Verizon-branded functionality back."
And Apple isn't? Since when do phone manufacturers get a percentage of monthly service fees? As for crippled, where are the third party apps, media streaming capabilities, ability to use MP3 ringtones, and instant messaging capabilities of the iPhone? If you think Cingular and Apple are working closely together to protect revenue streams you're delusional.
Yes, Verizon is greedy and likes to cripple most of their phones. The same can not be true of their smartphones, which include all the above functionality and more.
HerbieC @ Jan 29th 2007 11:15AM
vzw + apple = cell phone domination... at least in the US
Bloobie @ Jan 29th 2007 4:35PM
Actually, Verizon lost its spot as the #1 carrier in the US (in terms of market share) a while back when AT&T purchased Cingular.
kaybee @ Jan 29th 2007 11:17AM
My guess is that they pursued deals with Verizon and Cingular at the same time. The rubber meets the road for Apple with the iPhone in how much control they can get over the iPhone’s services (visual voice mail, distribution, tech support, etc). Verizon and Cingular have such similar market shares that it wouldn’t matter which company the iPhone went to, it just depended on who gave Apple the better deal. So it is probably wrong to speculate that Apple "chose" verizon over cingular at first.
wako @ Jan 29th 2007 11:19AM
Come on guys! Cingular? Its AT&T now ;)
Jim @ Jan 29th 2007 11:21AM
You have GOT to be kidding me... The one thing that would have had me jazzed about staying with Verizon and the pass on it. Obviously, I'm not the most important thing to Verizon but... Verizon probably would have wanted to cripple the Wi-Fi, plaster their red logo all over the phone and have their sucky V-Cast play a major part of media downloading. Keep selling those tired and recycled Razr's Verizon and keep losing market share. I'll be switching, thank you...
Castle @ Jan 29th 2007 11:21AM
>>Apple wanted a percentage of monthly service fees"
This is plain ridiculous. Why would the service provider that runs and maintains the network have to pay a percentage to the manufacturer of the phone. This could explain whey the iPhone charging $500/600 with a two-year contract (being that even the BlackJack on Cingular is selling for $200 with a contract). I could understand Apple wanting control over how the product is distributed but taking money from service fees that they aren't providing services for is pretty silly.
Sam @ Jan 29th 2007 11:21AM
This doesn't really fly with me. Why would Apple want to have to design both a CDMA version and a GSM version? Also I suppose to Verizon 'mutually beneficial' would mean being able to complete cripple the phone and charge $80 a month for data services. No. Thank. You. I left VZW for a reason.
fred @ Jan 29th 2007 11:22AM
Everybody has their preferred wireless provider. I'm on Verizon now, I'm pretty happy with it, but Cingular knows what Verizon should have when they were approached on this. People are going to jump ship to get this phone. I know I will. I'm already trying to come up with a creative way to get rid of Verizon.
PreGHz @ Jan 29th 2007 2:28PM
http://www.engadget.com/2007/01/12/verizon-increases-sms-rates-customers-now-free-of-their-contr/
primetime4 @ Jan 29th 2007 11:24AM
This is like the Trailblazers passing over Jordan.
Paul @ Jan 29th 2007 1:52PM
primetime - thank you for making a comment that aspiring geeks can understand until we recieve our full geek education.
Ayle @ Jan 29th 2007 11:30AM
I'm thinking about something: Is cingular is really earning something with the iPhone? I wonder if the price we have are not the full price and cingular hoping to get money on the contracts? That would make sense......
Castle @ Jan 29th 2007 11:31AM
>>This doesn't really fly with me. Why would Apple want to have to design both a CDMA version and a GSM version?
For the iPhone to be released globally it will ultimately need to have both CDMA/GSM version since.
Xinyu @ Jan 29th 2007 11:32AM
I can just see how the Board members of Verizon are regretting their decisions now.
doyouflip @ Jan 29th 2007 11:34AM
Wow. It only took 1 post before someone mentioned "fanboy". It must be a day that ends in "y"
G Money @ Jan 29th 2007 11:34AM
Can we PLEASE GET CONFIRMATIONLESS COMMENTS!!!!
Anyway, this makes sense that APPLE would have wanted to team up with the most powerful cell provider in the US. Say what you want about VZW and there rediculous fees, their service is flatout second to none, and works ANYWHERE. There is a reason they are the priciest and have the lowest churn rate.
I ultimatly believe that Apple went to cingular simply as a stop gap until they get thir own MVNO service up and running. Think about it, an MVNO gives APPLE COMPLETE CONTROL, lets people download itunes directly to their phone and leads apple on there quest to world domination!!!!
CONFIRMATIONLESS COMMENTS PLEASE!
JL @ Jan 29th 2007 11:35AM
apple's customer service clause could only improve verizon's customer service.
walk into any verizon store and you will figure that out fast.
note to verizon - learn to spell the word flexibility.
i'll be shopping for another provider at the end of my verizon contract. unfortunately, cingular will probably not be on the list due to our 'ruralness'!
Jeff @ Jan 29th 2007 11:37AM
"Apple wanted a percentage of monthly service fees"
Guess that probably puts to rest any notion that the first couple years of service would be subsidized.
(If Apple wants a cut of the fees but there are no fees to get a cut of... well, you do the math. It would be more likely for Cingular to *raise* their fees to compensate for this, so that they don't end up losing money once Apple takes their cut.)
Rishard Chapoteau @ Jan 29th 2007 11:46AM
Thanx to them not wanting to deal with Apple myself and many other loyal Verizon fans are going to leave them. Bad move Verizon!
Uninvisible @ Jan 29th 2007 11:48AM
I'm willing to bet that whether or not AT&T (Cingular) makes money with the Apple deal, they'll still be whistling all the way to the bank because it's a way of drawing customers in to their service anyway. As an example, say your significant other purchases an iPhone, and you both want to be on the same service plan. Well, why not switch over? Now AT&T (Cingular) has a new customer, and their rivals have lost two customers. They win.
I'm a neutral party with Sprint :)
Jeff @ Jan 29th 2007 11:50AM
To me this sound like Verizon covering their rear ends due to the popularity of the iPhone. If we remember Apple was working with Cingular back with Moto on the iTunes phone. Thats when Apple decided to make their own. I don't doubt that Apple didn't talk with Verizon but just as an option if things didn't work out with Cingular. Also the reason Apple is not letting the phone be discounted is due to the iPod line up and not wanting people to be able to get an iPhone for $199.00 and then decide not to get a nano. The reason for the long term contract is not because Apple wants to be exclusive but because Cingular is not going to make changes to their network and not get it exclusive. Bravo to Cingular for landing the deal of the century.
Note: I am currently with Verizon and am pissed off that my contract doesn't expire until Nov 07'.
MaX PL and the 360 r4pe Tr4iN @ Jan 29th 2007 11:55AM
i'm sorry but you all must admit youre not Verizon haters, youre all just iJob lovin hippies who will pay anything for anything Apple.
verizon has the best service in the united states. if you dont agree, youre arrogant.
arguements against verizons customer service are just plain foolish. whats the problem with signing up for a phone contract? the contract? the service agent? or is it the customer who wants to get the best deal and wont stop complaining til they get it?
i am guaranteeing that iJobs fanboys will be the minority in changing over to cingular just for the apple phone( yes, apple phone). in six months time there will be half a dozen other manufacturers with a similar product; products not forcing us to use any proprietary software.
Christian @ Jan 29th 2007 12:05PM
Verizon won't miss this version of the iPhone at all. When people start buying the iPhone, a couple of things are going to become apparent very quickly. As a former Verizon Customer (Cingular Now) people are going to discover that edge is dirt slow (56K slow) and the Internet portion of the iPhone is going to be painful to use. Wifi isn't available in most cities short of your local book store, high school food spot, or hotel. If I wanted to surf at home, I'd just use my computer. That leaves the iPhone primarily as a phone and an iPod. Well, guess what, I can't really rationalize a 600 phone and I've already got an iPod. The phone looks great and for the first week it will likely hypnotize you into thinking all is right with the world, then you'll discover you've been had. The blackjack today does everything the $400 extra iPhone will do in 5 months. For every one iPhone Cingular sells, Verizon will move 10 of their other handsets, and not have to take in the rear from Apple. I'm no Cingular fan and I left Verizon, because they're even worse, but rest assured, Verizon isn't missing out on much by passing up the iPhone, especially not this 3G crippled version.
DM @ Jan 29th 2007 12:06PM
I find it funny that these apple fans are so excited over a phone they could not afford.
Tyler @ Jan 29th 2007 1:08PM
u couldnt afford it either..
Gadget Chick @ Jan 29th 2007 12:08PM
"verizon has the best service in the united states. if you dont agree, youre arrogant."
LMAO, who knew having an opinion makes you arrogant...
Robert Andrews @ Jan 31st 2007 2:05AM
I love how people say X provider has the best coverage in the United States. Have they actually taken their phone to every state and tested?? C'mon people, they have got you repeating their commercials!! Honestly, you won't know which service better suits whoever, like people saying verizon has coverage anywhere, try going out to the boonies, then tell me they have coverage anywhere, most likely if there is coverage it could be a regional roaming partner like Alltel. My single main beef with verizon is their phones, and the support with the phones. I had to drive to multiple stores for them to tell me my phone was a warranty service, even though i knew that it already was, but they had to TEST it with their special hardware testing. T-mobile however, asked no questions when it came to a handset warranty replacement and since I live in Washington state Seattle metro area where their headquarters are, I think ill be sticking around. Remember, just because a service you have works in big urban areas, doesn't mean it will always suit everyone.
Xinyu @ Jan 29th 2007 12:10PM
Apple would not allow Verizon to ruin the experience of the iPhone by installing stupid softwares, and I am glad that Apple stays true for its belief and stays in control of how iPhone should work.
DM @ Jan 29th 2007 12:37PM
"Apple would not allow Verizon to ruin the experience of the iPhone by installing stupid softwares, and I am glad that Apple stays true for its belief and stays in control of how iPhone should work."
LoL. Same old stupid Xinyu. Tsk, Tsk.
Ben @ Jan 29th 2007 12:34PM
Is the iPhone lifetime exclusive to ATT in the US? If not, we may still see a VZW iPhone in the future.
Xinyu @ Jan 29th 2007 12:38PM
iPhone is exclusive to ATT for at least 2 years (some say 5 years). Of course Apple will expand to other carriers in the future to sell more iPhone. But I hope that Apple still demand the same control over the iPhone interface and not let carriers mess around with it.
Xinyu @ Jan 29th 2007 12:40PM
DM, I guess you are the same old stupid DM right? Do you have anything intelligent to say here, or you are just trying to show your stupidity.
Xinyu @ Jan 29th 2007 12:42PM
Here is a quiz for everyone: What does DM stand for?
Answer: DuMb
Mike @ Jan 29th 2007 10:31PM
wow, that was dumb...
randy @ Jan 29th 2007 1:01PM
I don't understand your problem with Cingular or love for Verizon. Where I live and travel I have never noticed a difference between the two, and have had both services within the past year. Cingular's data plans can not be beat by Verizon, Verizon has one type of unlimited data plan, $40/month in a bundle with 450 minutes ($79.99 total) with Cingular you can get the $19.99 MediaNet unlimited, the $19.99 unlimited smartphone, or the $44.99 PDA unlimited data plan. Only the last one is more than Verizon and you don't need that plan with the iPhone, only one of the $19.99 plans. Also, HSDPA is just as fast if not faster than EVDO and is available almost everywhere I have to go and will match EVDO in coverage soon. Cingular is not perfect, but you make it sound like they are the devil, when in fact they are only one of the devils along with all the other major corporations in this country.
Finally, Apple could have put HSDPA in the iPhone but opted not to, what makes you so sure they would have put EVDO in had they gone with Verizon?
I really would like to hear a response to this comment, unless you are just making arbitrary uninformed comments.
Peter @ Jan 29th 2007 1:33PM
Anybody that has negotiated a large deal knows that you never negotiate with only one party. Even if Apple desired Cingular for their GSM service (and thus ability to push world-wide , they would have never let Cingy know that they were the first choice -- that would just be stupid. So, frankly, this sounds like VZW trying to hop on the iPhone press cycle.
Second, I travel quite a bit and have colleagues in many cities in the US. The folks on the East Coast are just as big VZW fanboys as the folks on the West Coast are for Cingular. This argument that there is a clear leader between the services is only convincing people that haven't left their backyard.
Warren @ Jan 29th 2007 1:06PM
I am SO pissed that VZW passed on this product. You would think that VZW would see how many iPods fly off the shelves and think they could gain a boatload of customers. I have VZW now - and I am not going for iPhone v1 because I think that as someone said above...there will be problems and bugs with the first version and Apple will without a doubt create something better the second time around. VZW cell service is the best without question and I would still be hesitant to leave VZW for ATT when iPhone v2 comes out.
Frankenstein Black @ Jan 29th 2007 1:16PM
A Verizon iPhone? whats the point? A gimped phone that could only be used in North America? Apple wised up and realized that access 95% of the global mobile market share (GSM) is more desirable. Yes?
xxdesmus @ Jan 29th 2007 1:45PM
Personally, I am glad it didn't come to Verizon.
It sounds like Apple was being its usual smug pushy self, and Verizon doesn't really need crap like that.
Verizon is already has its own problems to fix (like crippling its phones), they don't need this flaming piece of over hyped and over priced Apple s**t as well.
fred @ Jan 29th 2007 4:16PM
One of the things I find so funny about your post is that you are SOOOOO ANGRY at Apple, and the people who enjoy their products. You don't know that the phone is a piece of s**t as you so eloquently put it, and in the same way we don't know that it will be good! But, hey good for you! Keep thinking for yourself, and fighting the establishment, or whatever it is you're doing. Don't think about the fact that a super successful product is usually that way because it works. And hey, that whole mouse thing they started selling (not invented) that's just a bunch of hype too. I'll keep my keyboard shortcuts thanks very much! Enjoy Vista, dork.
Sophist @ Jan 29th 2007 2:02PM
*
jott @ Jan 29th 2007 2:05PM
wow, i didnt know people chose their operating system, phone, or MP3 player based on the ethnicity of the company's CEO. way to go applesucksLeo, yours is the first racist post I have ever seen on engadget.
Sophist @ Jan 29th 2007 2:11PM
applesucksLeo...
I suppose it's within the parameters of normalcy to adopt a screen name that reflects your distaste for all things Apple, to then go about posting only on subjects relating to Apple (in which, as one can predict each time, you proceed to criticize Apple for everything from over-priced gadgets to the price of oil), and to even refrain from making any substantive or insightful comments -- I've to expect these things. But really ... are the anti-Semitic remarks necessary?
(Of course, I didn't find anything in the Wiki article you linked to that indicated what Jobs' religious affiliation is ... but why let something like FACTS get in the way of your bigotry?)
mj @ Jan 29th 2007 2:27PM
"Apple wanted a percentage of monthly service fees"...
well well well greed has no ending. Seems Jobs wants to milk customers both ways. Good luck to all morons who go ahead and pay 600usd for iPhony.
Kyle F @ Jan 29th 2007 6:06PM
actually the percentage of service contracts is justified. currently cingular/att supports all manufacturer's phones through their own tech support line, that service is part of the monthly contract customers pay for. since apple wants to have control over the tech support offered for their product (respectable) they should be given a portion of the tech support funds wrapped in to the monthly contract. since when does successful business model = greed?