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 1)
ljbad4life @ Jan 29th 2007 11:18AM
Pretty stupid of verizon in some aspects. If apple does all the tech support for the iphone then verizon could have saved millions in labor alone that would have been used for training (to support the iphone), depending on how much apple percentage wanted it could have been a wash... i.e save on labor and tech support and loose the same amount on the percentage to apple from the monthly fees.
The model of locked phones seems to just blend with cdma than with gsm... ironically
wheelsee @ Jan 29th 2007 11:31AM
I call sour grapes on this one...
Mario Mejia @ Jan 29th 2007 11:31AM
haha!
damn, I guess some companies realize this could be a waste of time and effort. $600 for a phone? omg why would anyone do that?
Jesse S @ Jan 29th 2007 11:33AM
There is no such thing as a locked CDMA phone. It's just that some Carriers (like Sprint or Verizon) don't allow forign ESN/MSN numbers in their system, so you can only use Sprint service with a Sprint phone, but you can use a Sprint phone on Altel (I believe they still allow forign ESN numbers) or some Taiwanese or Korean or Chinese CDMA provider.
GSM phones are the only locked phones, get your facts straight.
Oh, and although the iphone will sell well, it's stll a piece of crap compaired the the Samsung i730 or i760, or even the blackjack.
Rytr @ Jan 29th 2007 12:04PM
@Jessie S... hey..idiot.. I believe they were referring to the locking of the UI/OS of the phone you dolt... Get yourself straight before ripping others here
elgee02 @ Jan 29th 2007 12:09PM
Sigh.. dammit Verizon.
At least it says something that VZW was Apple's first choice, I guess.
Scott B @ Jan 29th 2007 12:33PM
Apple didn't want that useless and limited VZW UI on their phone...and I don't blame them.
elgee02 @ Jan 29th 2007 12:45PM
Scott, can you read? Seriously man, don't be so dense.
APPLE WENT TO VERIZON FIRST, VERIZON SAID NO
This has NOTHING to do with VZW's UI you moron.
fincher @ Jan 29th 2007 1:27PM
Verizon doesn't lock its phones but once a CDMA phone has been activated, the phone is indeed locked to that carrier. Sprint and U.S. Cellular (Alltel?) do this. It can be unlocked if you get the sub-lock code from the carrier.
Ry @ Jan 29th 2007 1:34PM
Good move on Verizon's part.
LordObento @ Jan 29th 2007 1:42PM
Scott, iphone is a PDA, no Verizon PDA has a Standard UI. If it came to Verizon the Mac OS would have been intact. The Standard UI rant is a little old and pointless when talking about the iphone
FireAndGlass @ Jan 29th 2007 2:11PM
Not a surprize that Verizon said no at all. They are they most demanding and controlling of all the carriers. If any feature of a phone is nerfed on any carrier, it's nerfed on Verizon at least. Apple is rediculously stubborn about how it's products are distributed too... Apple and Verizon getting along was about as likely as Donald and Rosie getting along. hah!
TINO ROMERO @ Jan 29th 2007 2:20PM
Verizon yet again drops the ball!!! Dam they suck and I work for them!!
Jesse S @ Jan 29th 2007 2:50PM
@5: Verizon doesn't lock their high end phones. Who's the idiot now?
@9: I am not sure, but I believe that after a phone is removed from the account (eg. you use a different cell phone/esn number on the line) it is un activated, and it can be taken to another carrier. I'm not entirely sure though.
Honestly, I'm not surprised. Verizon has the widest/best network (Sprint is gradualy catching up, however) and they have some of the nicer phones (i730, i760, V3m, etc.), but they're very strengent on phones, which is why a lot get dropped. Honestly, I think it was more of the cut from profits of the plans than Apple covering the support/distrubution of the phone.
And again, there are better phones out there for the same price (or less) that are better...The only dolts who will buy this are Apple fanboys, and kids with mommy and daddies money.
VZWTech @ Jan 29th 2007 3:13PM
Wow. Just had to jump in on this one. Looks like everyone is just about to pass out from screaming about this one. Let's shed a little light, shall we? I'm not disappointed about this decision whatsoever. The whole UI argument is right out the window. Any & all PDA phones have either Windows Mobile 5.0, Palm OS, or something like it. The only reason VZW is demanding is because they want it to work every time, all the time, and don't want to waste time dealing with crappy devices. Also, with as much money as people are gonna be spending for this device, no PDA features or data? What a joke. Another thing is that VZW already has a tech support team that works on any & every phone. Why would a company want to spend money on two different groups of people just for tech support? Doesn't make sense. It all comes down to supporting the customer and VZW doesn't want to give up that connection with their customers
Jesse S @ Jan 29th 2007 4:11PM
I love you #15.
Ry @ Jan 29th 2007 4:28PM
But the iPhone isn't a smartphone. ;)
Jesse S @ Jan 29th 2007 4:50PM
17: Which is WHY it's shitty.
elgee02 @ Jan 29th 2007 5:08PM
Of course not Ry, by definition smartphone's aren't touchscreen.
T-Will @ Jan 29th 2007 5:19PM
"Smartphone" = no touch screen
"smartphone" = may or may not have a touch screen
CDMA Guy @ Jan 29th 2007 5:24PM
@13 - You are an indiot..go work for Sprint, oh wait they just layed off 5000 people and someone as dumb as you would likely not last long.
@7 You are as dumb as they day is long. VZW obviously woould not put their interface on something like this...moron!
beanspants @ Jan 29th 2007 7:52PM
I can't believe verizon made that decision if they did.
first, giving a percentage of revenue entices the phone providers to actually market and sell their phones, cutting back on carrier advertising costs, and would probably end the phone subsidy for the carriers.
then the carriers could define the revenue sharing agreement based on the work that the manufacturers are willing to do. this iphone thing will open the door for that for cingular.
Duncan @ Jan 29th 2007 9:23PM
I call BS on this story.
Developing the iPhone for GSM is a much smarter decision for Apple as it gives them a worldwide footprint day one (or at least day one after the exclusive deal is over). I can't believe that Apple's first choice would be to pigeon hole themselves to the US and Korea. I'm no expert, but if I were developing a phone, I would build it for GSM first and I'm willing to be Apple is smarter than I am :-)
For the record:
There were over 2 Billion GSM Subscribers as of Jun '06.
CDMA - 353 Million as of Sept '06
oh, and in case you're wondering,
according to this website:
http://www.funsms.net/largest_mobile_phone_companies.htm
Cingy has ~49 million subscribers
VZW has ~42 million
So, who would be your choice?
Yeah, me too... that's why I think this story is BS.
Somewhat off topic....
1. as for the VZW UI comments... if you have ever used a VZW Treo 650 you would understand the comment. Verizon screwed up the streamlined Palm messaging application so that they could rebrand it and seperate it out into MMS and SMS (probably had something to do with billing issues too).
2. The iPhone is a smartphone only because Apple is making 50% Gross margin on each one... smart for them :o)
T Man @ Jan 29th 2007 11:24PM
Really is a good move on Verizon's part. While Verizon has certainly been known to be, ahem, controlling (cough, V710, cough), Apple is many times more controlling. I'm sure Verizon looked at the conditions of the contract and said no way, Apple. We are not going to let you have all of the fun (ie, money from selling stuff).
I don't call BS on this, because Apple would want to go with a carrier that had a big user base, and had a very advanced 3G network. The New AT&T's 3G network is a joke compared to the coverage of Verizon and even Sprint.
fred @ Jan 29th 2007 11:42PM
re #23
as of last quarter, vzw has 57m subs and cing has 59m. vzw is on track to top them in the next two quarters b/c they've had higher net adds consistently for over a year, and they already topped cing's revenues in part b/c they're pumping a lot of data thru the network.
verizon's in position to dictate terms, and apple over-reached. those numbers are publicly available, and i don't work for any of 'em.
fred @ Jan 29th 2007 11:53PM
re: #15
it all comes down to vzw not wanting to share the revenue stream.
as far as i know, no wireless, telecom or cable carrier in any sector has been willing to share a portion of its subscriptions.
they'll give up a one-time spiff to a marketing partner or sales affiliate, but i've never heard of anybody sharing a take of the ongoing revenue streams.
if anyone knows of when a service provider did share a portion of subscriptions, i'd love to hear the details.
thx.
Brett @ Jan 30th 2007 7:11AM
im still trying to figure out how i feel about the iphone. theres SO much hype on it. in a way im jealous verizon isnt getting it but at the same time i feel reluctant to not getting it. i guess im still waiting for a catch. everyone is ranting and raving about it with ALL positive things to say and for as much talk on it, its just hard to believe something so "miraculous" is actaully going to be available in the US.
i think vzw tech had the right idea about having extra tech teams. and also i dont feel like cingular has the best finantial decisions. loko at the band spectrum auction, everyone had some sort of stratedgy with their spending of billions on band spectrum, except cingy who seemed to just pick spots of spectrum in different band widths throughout the country. just didnt seem practical for spending 4 or 5 billion on a lucky guess. i guess i just feel like cingy has always been that "lucky high school drop out" the one guy that dropped out of HS and is now making more than your local doctor because of a few lucky steps (ie...buying of at&t).
i think im getting into a rant...im done.
Cellphone Guy @ Jan 30th 2007 12:37PM
Why Apple would even consider running the iphones over CDMA network while the rest of the world in on GSM.
Marty @ Jan 30th 2007 3:16PM
Going with Verizon would have been a terrible mistake from Apple's perspective. There simply are not enough CDMA/ED-VO providers on the planet to waste time developing a phone for just that. I can't think of any successful phone manufacturer that makes just CDMA phones, it would be suicide.
Scott B @ Jan 30th 2007 3:46PM
haha @ #8. I know I'm late but I wanted to address the guy who called me a "moron". Usually moron's don't read or try to understand what's going on. The article says Apple & VZW couldn't come to an agreement stating that Apple's demands were too high citing my "they didn't want VZW's ui on there". It was sarcasm but I guess you couldn't catch that.
elgee02 @ Jan 30th 2007 7:51PM
Scott... wow dude, wow.
I guess you didn't catch the other comments after mine where several other people chimed in that THIS HAS NOTHING TO DO WITH VZW'S UI!!!!!!
This is a "smartphone", hence it would have it's own interface (OS), not a VZW one. Idiot.
Josh @ Jan 31st 2007 5:40AM
Both Verizon and Apple love to control every aspect of their customer experience, and it doesnt come as any suprise that it didnt work out between the two companies. Both companies are well managed, however I do wish that Verizon would have conceded a bit, and allowed apple to have the iphone on verizon. The iphone would be infinatly better with evdo data speeds right out of the box.
Iknow everything @ Jan 31st 2007 9:33PM
Let see. countries that use CDMA..There is Aruba, Bermuda, Bonaire, Brazil, British Virgin Islands, Canada, China, Curacao, Dominican Republic, Guam, India, Israel, Jamacia, Macau, Mexico, New Zeland, Northern Mariana Islands, Peru, Puerto Rico, South Korea, St Maarten, Taiwan, Thailand, Venezuela, and US Virgin ISlands to name a jsut a few...
Kevin @ Feb 1st 2007 3:59AM
re: #23
As far as the so called 2 billion GSM subscribers goes.. a good chunk of that is in China, who is SWITCHING to CDMA (better, more reliable technology ). Just because something is the largest and/or most popular does NOT mean it is the *BEST*. Look at Cingular :) Their numbers SUCK and Verizon Wireless has kicked their trash CONSISTENTLY for who knows how long!!!
As far as your customer base numbers go? When was the last time that site was updated?! Those numbers have to be from like, 2003 or something. (Look at response #25)
As of December 31st, 2006:
TOTAL CUSTOMERS:
VZW: 59.1 million (2.1 million added in retail stores, more than any other carrier)
Cingular: 61 million (they don't say how many they added in the store on their investor website
TOTAL CHURN (customer turnover, i.e. "way of measuring percentage of customers that disconnect service"):
VZW: 1.14
Cingy: 1.80
While Cingular has more TOTAL customers (including resellers Best Buy, Radio Shack, etc.), VZW has the most RETAIL customers (people who sign up in a corp store). Numbers don't lie, and if they do the SEC gets involved like they did with Cingular that one time.
LOOK AT THE NUMBERS!!!! Lok at the numbers for the past SEVERAL years. More people switch to (and *STAY* with) Verizon Wireless than any other carrier!! They can have the most customers, they can have "powerful stuff", they can have cheaper plans than VZW, they can say they have the fewest dropped calls. All of that doesn't matter if you can't use your phone when you want. Have you ever heard the expression "You get what you pay for?". Sure NO carrier in this country (not even Verizon Wireless) will get strong coverage on EVERY SINGLE SQUARE INCH of the United States, but I can tell you that Verizon Wireless is as close to that as you are going to get.
If one of the LARGEST countries in the WORLD (China) decides to switch their wireless technology to CDMA instead of GSM... you know something is going on :)
And yes, I do work for Verizon Wireless.... but the numbers speak for themselves...
Enough said........... FOR NOW.
Scott B @ Feb 1st 2007 1:23PM
elgee02,
wow dude wow...I guess you didn't catch the end of my last post that said clearly "it was sarcasm". you know like making a wrong or outrageous claim as a joke? i guess not. i've seen/used the treo 700wx and the vx6700 so i know they don't enforce that bs ui on everything. maybe i should have led with that instead of relying on your sarcasm detection switch to flip on.
Joe @ Feb 1st 2007 2:50PM
re: #34
"Just because something is the largest and/or most popular does NOT mean it is the *BEST*."
vs.
"If one of the LARGEST countries in the WORLD (China) decides to switch their wireless technology to CDMA instead of GSM... you know something is going on :)"
Huh?
veuveclicquot @ Feb 2nd 2007 1:22PM
Re. #34/Kevin: China does account for quite a few GSM subs -- but it also accounts for quite a few of the world's people, too. As for Chinese switching to CDMA, you are mistaken. Only 10% (probably less, in reality) of the mobile users in China use CDMA. The fraction of the user base in China using CDMA is even less the fraction of the subscriber base in the world using CDMA. Your statement about China "switching" to CDMA is inaccurate. In fact, the only reason that there is any CDMA in China is that the Chinese government gave in to US pressure over trade imbalances.
Moreover, CDMA networks have been launched and subsequently shut down in Australia, Hong Kong, Singapore, and several places in South America. South American CDMA subscriber growth is almost zero, as of last quarter.
As for "using your phone when you want", have you ever tried to use your Verizon phone outside the United States? Verizon has has piss-poor roaming capabilities, even in North America. This is a function both of the CDMA technology and Verizon's network strategy.
FYI, I have made my living off of CDMA for many years. But I can see the writing on the wall. CDMA is a technology of questionable relevance and dubious future. Apple's only blunder was approaching Verizon in the first place.
Robbie @ Feb 21st 2007 5:17AM
ok everyone, its time to stop with the childish name calling and just discuss facts. feel free to disagree with my statements, but do so in a mature manner.
1) CONTENT PURCHASING
correct me if im wrong, but "iphone" relates to "ipod", right? the whole purpose of it is that it is an "ipod phone", right?
maybe im not seeing this the same as everyone else, but right away that spells ui problems. not necessarily as far as the phones interface, but what about the content purchasing platform?
vzw phones are very strict about working only with content purchased directly through vzw's get it now/vcast service or whatever its called. (correct me if im wrong on this or if this has changed) but i have never ever successfully mms or bluetooth or cabled a song from my computer or cell phone to a vzw phone.
(side note: yet with gsm phones it is easy as pie to email, mms, cable, or bluetooth/obex any mp3 or sound or video file from a phone or pc to another gsm phone.)
there is an immediate conflict of interests. vzw wants people to purchase content exclusively from their service, whereas apple wants it purchased from itunes. im more likely to believe any sharing of profits was probably related to content purchasing through some consolidated store, which seems more likely, rather than related to voice service mrc's.
2) CURRENT PARTNERSHIPS
as i mentioned above, vzw phones only download content from the vzw service. in contrast, cingular has had a working partnership with apple since the very first itunes-hybrid phone was released in the us, the ROKR. it makes much more sense to me that apple would release an iphone with a carrier that they have always had itunes phones with (ROKR, RAZR w/itunes, SLVR L7, etc).
Cingular is a lot more open to allowing outside content purchases with music, as it also has agreements with napster, yahoo music, emusic, etc...
3) GLOBAL STANDARD
GSM stands for Global System for Mobile Communications. We can argue all day about which is better and which has better coverage. But at the end of the day, the global standard is GSM, and therefore it has the most subscribers. Theres no arguing that.
Lets say you were going to sign an exclusive contract for your brand new type of scissors. There are two main competitors, Left-handers-r-us and Right-hand-man, which would you sign your deal with? Obviously the one that has the largest customer base. its so obvious im not even going to say it. if you really cant figure it out please press ALT and F4 at the same time to see the answer. lol.
im not sure if the exclusive deal is worldwide, but if it is not then apple could easy market the phone with other GSM providers in over 200 countries. why choose cdma with only a handful of countries? And who is to say after the exclusive deal is over that they cant simply swap in a cdma radio? are there not gsm and cdma palm phones? come on now people.
4) DEMOGRAPHICS
i wont get too far into this because i cannot cite any sources to show facts. but i believe cingular was initially intended to be a "hip" brand with a "hip" image (think the orange mascot "Jack"). this marketing is certainly more in line with the type of audience that uses ipods.
also, gsm users are probably more into the lastest technology than cdma users. cdma phones are really locked into however the carrier wants them. although gsm phones can also be subsidy locked, theyre originally based upon open standards. (and can easily be unlocked too). gsm phones are easy to import/export/share/borrow/whatever you want. its much easier to import the lastest greatest gsm phone and just pop in your sim than trying to import a cdma phone.
5. TECHNOLOGY
since gsm has more of a user base, its only natural that gsm providers get newer technology phones first. cingular had the first itunes phone (rokr), the first razr in '04, tmobile was the first with uma, gsm is the first with actual tv tuners, first with simultaneous voice and data, first with visual voicemail, etc.
--------------
with all this in mind, it just seems like such a basic decision to go with cingular. is it really just me, or is it a no-brainer?
--------------
ok i changed my mind. i do want to get into the whole "which is better" stuff.
so as far as the comparison arguements from this thread go...
CDMA can actually handle more simultaneous voice calls, but Cingular has more towers than any other carrier in the US. so do you need better coverage near your home/work, or more towers in more places? if your home/work gets good signal with cdma and thats where you need it, go with cdma. if you need more towers on the road or you move around a lot, go with cingular.
CDMA does have a much larger current broadband footprint. HSDPA will be faster, though. and it will allow for simultaneous voice and data (ie. video conference cell phone calls, showing someone pictures on their screen as you describe them, sending someone a file while you explain it, etc). if you need an "is everywhere right now" and stable broadband connection, go with cdma. if you are lucky enough to be in a hsdpa area and you want the fastest or want the latest in technology, go with GSM.
CDMA is only in a handful of countries. GSM is in over 200 countries. Do you ever even leave the country? If not, this doesn't even matter and you can consider CDMA. If you travel abroad frequently, you will definately want to consider a quadband GSM phone.
CDMA 3G services are more uniform throughout, though. GSM 3G is not the same in the US as other countries. Keep in mind if your 3G is 1900 or 2100, and which frequency 3G is on where you are going.
CDMA is pretty much standard. With GSM, you have to keep in mind that 850, 900, 1800, and 1900 are used and note which your phone supports.
If you are happy with the selection of phones from carriers, check out CDMA. if you would like to be able to import from other countries or direct from manufacturers, you may want to consider GSM.
anyhoo... i have cingular so i get an iphone and you guys dont! na na na na na! haha im jk. i dont buy from itunes because its a pain in the butt to try to use your songs in anything but an ipod. which ironically is contrary to the idea of standardization that started GSM. plus id much rather have a real smartphone. if nokia is listening, please make a HSDPA communicator! 9600 please? with video calling? please!!!
goodnight all.
Steve @ Mar 2nd 2007 3:20PM
So, Apple went to Verizon wireless first. Makes sense in the more widely available 3G market. No point in havign thsi phone on a slow network. As with anyting, the first time you launch a product, you want to go local. See how it seels. Then, you go global. It's rare that a phone is exclusive to a provider forever. So, why not go with the "most reliable" thing and see how it takes off?
And, as stated in the previous post, to assume Apple can't make CDMA and GSM is kind of insane. Every other phone manuacturer does. Otherwise, why does any manufacturer make a CDMA phone?
As far as number of subscribers, that's always a difficult thing. Are we talking domestic, global... voice users, data users, what is our target?
I would think Apple was going for domestic data users. Almost suprised Spritn wasn't a first choice. They're trying to find the biggest splash they can find...
Either way, it's expensive as heck. There will always be people to buy it, but 10 million seems awful high. I question fi this phone will do well in Japan and Europe, where much better phones are already available.
WillZ HELIO @ Mar 16th 2007 1:01AM
No matter what anyone says this phone is gonna sell i work for cingular and i have people call in daily asking me aboout this phone