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Gadgets Verizon Said No to Apple's iPhone Two Years Ago
Tuan Nguyen (Blog) - January 29, 2007 1:52 PM

64 comment(s) - last by SNM.. on Feb 7 at 7:44 PM

Apple's terms was too much said Verizon

This week, Verizon Wireless revealed to reporters that it had been approached by Apple roughly two years ago for a partnership deal with the iPhone but later rejected Apple's proposal. Verizon Wireless vice president Jim Gerace said in a statement that the terms that Apple presented were not mutually beneficial.

Verizon Wireless does not support the GSM mobile technology, which Cingular and AT&T both support. The iPhone, which is poised as an international phone, uses GSM while Verizon phones use CDMA technology. Some argue that CDMA technology gives better reception and signal strength than GSM. Two years ago when Apple's iPhone was still in development, it was very much possible for Apple to go with CDMA. At the time, Verizon had a much better brand name than Cingular as well, making it a sensible move for Apple to have chosen Verizon as its first choice.

Reports indicated that Apple wanted to receive a percentage of subscription fees from Verizon customers who purchased the iPhone. Apple also wanted complete control over how the iPhone was developed and how it was launched. This did not sit well with Verizon's decision makers. "We said no. We have nothing bad to say about the Apple iPhone. We just couldn't reach a deal that was mutually beneficial," said Gerace.

Mark Siegel from Cingular expressed quite the opposite. "We think this is a win for Apple, and it is a win for Cingular," said Siegel. Apple's 4GB iPhone will launch in July from Cingular with price tag of $499 with a two-year contract. The 8GB version will stand at $599.

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By Brainonska511 on 1/29/2007 2:02:58 PM , Rating: 5

Why would Apple deserve a share of the money from subscriptions to phone service for those that use the iPhone? Apple isn't providing the network, they are only providing the piece of hardware that is capable of using the network, which only should give them a one time fee, as seen through the purchase of the iPhone hardware by the consumer.

RE: Hm

By fic2 on 1/29/2007 2:09:56 PM , Rating: 2

Sounds like Apple is trying to get what the music companies want from Apple. The music companies want money for each iPod Apple sales, Apple wants part of the phone subscription that Cingular sells. Apple said no to the music companies. I think Verizon was smart saying no to Apple. I don't think that Verizon was smart telling the world that they turned down Apple. I guess time will tell.

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RE: Hm

By gramboh on 1/29/2007 2:22:43 PM , Rating: 2

To me, it's a good idea to disclose this. If I were a shareholder of Verizon, I'd be happy they didn't enter into a bad deal which wouldn't net them profits just so they could partner with Apple. They are a business after all.

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RE: Hm

By thebrown13 on 1/29/2007 2:23:44 PM , Rating: 4

We need a new name for Apple. A$$le? Something, they're just money grubbing $#@#s now.

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RE: Hm

By Hare on 1/29/07, Rating: -1

RE: Hm

By thebrown13 on 1/29/07, Rating: 0

RE: Hm

By Master Kenobi

(blog) on 1/29/2007 3:58:23 PM , Rating: 5

Crapple was always a favorite.

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RE: Hm

By Master Kenobi

(blog) on 1/29/2007 3:58:23 PM , Rating: 3

Crapple was always a favorite.

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RE: Hm

By Hare on 1/29/2007 4:17:37 PM , Rating: 2

I wasn't saying that MS are bad guys. It was just an example. Depending on the poster the bad guy always seems to be Sony, Apple, MS or some other big succesful company.

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RE: Hm

By MDme on 1/29/2007 7:09:44 PM , Rating: 2

MS at least gives back a lot of money to charity and philantrophy.

I don't give a rat's @$$ to Sony and their proprietary, over-hyped products.

On apple, yeah, they're a double standards company too. remember them patenting everything with the word "i" in it. They also went on to make the "iPhone" which already had been patented by another company.

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RE: Hm

By jtesoro on 1/29/2007 10:52:33 PM , Rating: 2

Unless you're talking about something else entirely, it is Bill Gates and not Microsoft that is giving a boatload of money to charity.

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RE: Hm

By SirRoger on 1/29/2007 10:53:56 PM , Rating: 2

Businesses are supposed to make money. That is the purpose of businesses.
The only reason MS should give money 'back to the people' is if it makes a profit in the long run. e.g. improves their image.

Apple should pursue a profit by any means possible as long as they follow the same rules applied to everyone else. Their patent policy is questionable, but if they feel they can get a cut of a cell carriers profit, put it in the contract.

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RE: Hm

By MobileZone on 1/31/2007 9:05:02 AM , Rating: 2

Totally Ditto. Crapple is EVIL.

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RE: Hm

By borowki on 1/30/2007 12:44:02 AM , Rating: 2

App£€?

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RE: Hm

By deeznuts on 1/29/07, Rating: 0

RE: Hm

By cochy on 1/29/2007 3:13:23 PM , Rating: 4

I'm sure customer interest for this phone is hot right now. However when it comes we will see how many people are willing to drop $500 for a phone. According to a San Fransisco Chronicle article I read over the weekend, Americans pay on average $60 for a new phone. That's 10x more for th 8 giger. I found Steve Balmer's quote to be the funniest.

quote:
We like our strategy...We're selling millions and millions and millions of phones a year. Apple is selling zero phones. In six months they will have the most expensive phone by far ever in the marketplace.

He's referring to phone with Windows Mobile.

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RE: Hm

By jtesoro on 1/29/2007 10:56:47 PM , Rating: 2

I'm sure Ballmer also liked his Plays for Sure strategy. Up until he came out with the Zune, that is.

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RE: Hm

By jon1003 on 1/29/2007 3:31:00 PM , Rating: 2

I can't believe Apple was thinking of limiting the phone to CDMA. The majority of the world uses GSM, like it or not. They would be limiting their sales.

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RE: Hm

By thatsiebguy on 1/29/2007 4:02:21 PM , Rating: 2

CDMA isn't the real concern. Verizon and their obsession for neutering their phones options is the real one. Sounds like the inability to give Apple closed development went against this mentality and pissed them off.

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RE: Hm

By MobileZone on 1/31/2007 9:08:30 AM , Rating: 2

Without 3G, the phone is $500 bucks.
How much it would cost if it had HSDPA on it? A G4??

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RE: Hm

By InsaneGain on 1/29/2007 5:44:49 PM , Rating: 2

Well really, Apple is entitled to, and should, ask for whatever it thinks it can get away with. That's what free enterprise is all about: ask for whatever you think you can get- the market will decide if you will actually get it.
If Apple could make a case that a lot of people will switch or attract new customers to a service just so they can use the iPhone, then maybe Apple can legitimately command some kind of cut from those new customers. Obviously Verizon didn't think the iPhone will be hugely successful. Time will tell.

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RE: Hm

By Pandamonium on 1/30/2007 1:27:00 PM , Rating: 2

Apple isn't entitled to anything except the right to "ask for whatever it thinkts it can get away with."

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RE: Hm

By crimson117 on 1/29/2007 7:10:23 PM , Rating: 2

It's because the iPhone is expected to be so popular that it will really drive customers to whichever carrier sells it. The phone company is getting a ton of free customers based on a lot of Apple's work. That would be Apple's reasoning, at least.

It would seem Verizon hates itself and therefore never wants any of the hottest phones until they're a year or two old. Razr and now iPhone, Verizon's always the last to market when it comes to trendy phones. But who knows, maybe they make a better profit by selling less trendy phones and marking them up, than by making sacrifices to partner with the hottest (and demanding) new phone manufacturers like Apple.

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RE: Hm

By Gholam on 1/30/2007 3:49:19 AM , Rating: 2

Thing is, "trendy" phones make up an almost nonexistant portion of the market. Apple's sales *target* for the first year of iPhone is about half a percent of what Nokia *sold* last year. Big money is in volume.

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fvck cingular

By exdeath on 1/29/2007 2:31:57 PM , Rating: 5

Went to Cingular for a year after Altel (CMDA); the service from Altel was excellent but they kept screwing up my billing over and over again.

Switch to Cingular (GSM) and the service sucked. Always sounded like a cat screaming through a tin can through a fan. Do they encode the voice data at 300 bps 4 bit or something? Quantization noise made it impossible to carry out a conversation and it would drop every other sample. One single bar of reception no matter where I went. Tried with 3 different brand phones before we canceled.

Switched to Verizon (CDMA) and the service is crystal clear like a land line, never any problems.

Seems in my area CDMA is the way to go, so I won't be going back to GSM any time soon.

RE: fvck cingular

By mydogfarted on 1/29/2007 2:47:40 PM , Rating: 2

For some reason, Cingular/AT&T seem to always get the new "it" phones: Sidekick, Razor, etc. I love Verizon's signal range, but just once would like to have a shot at the cool phones first.

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RE: fvck cingular

By exdeath on 1/29/2007 3:16:48 PM , Rating: 2

Just laugh at the bling bling idiots with their razor's when they can't even make a clear phone call, then again when their phone doesn't have a memory card slot, a reliable key pad, or when it breaks, etc.

I have a VX8100 and I got a memory card and put a few transcoded full length movies on it for the sole purpose of pissing off the RAZR owners who don't have enough internal memory to do the same.

I'd rather have a plain phone that worked good as a phone myself. If I want a digital camera I'll get a 16 megapixel SLR. If I want to play video games I will bring a GBA/DS with me.

It's funny how people think they are so cool with their stupid phones when said phone sucks at everything.

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RE: fvck cingular

By EglsFly on 1/29/2007 7:37:25 PM , Rating: 2

Older RAZR's didn't have a memory slot, but the newer ones do. Case in point, the RAZR V3m has a microSD memory slot, in which you can add memory so your statement is not entirely correct.

Why would someone else owning a product other than what you own, piss you off? WOW! LOL!!!

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RE: fvck cingular

By MobileZone on 1/31/2007 9:13:43 AM , Rating: 2

It's because Motorola phone's UI is the WORST around. Using the phone is harder than understanding COBOL. Not to mention the bugs, failures, etc.

Even that way, there are millions of dandy trendy bambis that buys these phones because they think they "improve your persona".

iPhone will share the same market segment of dandy Razrs.

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RE: fvck cingular

By kamel5547 on 1/29/2007 4:07:06 PM , Rating: 2

VErizon had the RAZR first.... Sidekick is T-Mobile exclusive, has been for years. I have no idea what (besides the iPhone and Blackjack) Cingular has ahd exclusively...

Non of their products (Aside form the iPhone) really seems to differentiate itself from the competition's offerings. Personally I bailed from Cingular to T-Mobile and am just as happy for it. IMO Cingular has never had a "cool" phone first...

FWIW Verizon's exclusive on Motorola Q doesn't look too shabby, can't figure out why no one is picking it up though.

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RE: fvck cingular

By FITCamaro on 1/29/2007 9:15:23 PM , Rating: 2

Verizon has the Razor and theirs is better than Cingular's. I worked for Sprint for a year and Cingular's reps always "failed to mention" certain things. Things like how their local plans only covered part of the state instead of the entire thing. So people would get a phone in Orlando (i lived in florida) and go to Miami and get charged roaming.

Cingular in my mind sucks. All my friends who had it have dropped it and gone to Verizon.

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RE: fvck cingular

By Desslok on 1/29/2007 2:56:48 PM , Rating: 2

And here I thought I was the only one that had a billing problem with Altel. Must have happened at least 5 times.

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RE: fvck cingular

By exdeath on 1/29/2007 3:09:26 PM , Rating: 2

Yup. Kept turning our phones off and putting up the 'you can now pay your Altel bill...' crap even though the bill was always paid in full every month. It would accumulate every month until it was showing like 3 and 4 months past due even though it was paid monthly.

We would keep getting it taken care of and have them print stuff showing it was fixed, and the next bill would still be messed up...

We had an emergency and we were in the middle of closing on a house the last time they shut off the phones. That was the last straw.

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reception

By djcameron on 1/29/2007 3:07:40 PM , Rating: 4

quote:
Some argue that CDMA technology gives better reception and signal strength than GSM.

CDMA is clearly better than GSM. Does anyone actually argue this fact? Building penetration is almost non-existent with GSM. After years on GSM, I finally switched to CDMA and I could not be happier.

RE: reception

By Aikouka on 1/29/2007 3:27:55 PM , Rating: 2

It's definitely true. I have a cingular phone (GSM) and my reception in a store is pitiful compared to the rest of my family (they have Verizon). I really went with Cingular for the roll-over minutes, but I'd like to be able to use my cell phone without having to go outside in some places :(. I also can't use any of the new "bling bling" phones (as another poster called it), because of work-related restrictions, so that reasoning won't keep me with Cingular (now AT&T).

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RE: reception

By ninjit on 1/29/2007 3:30:24 PM , Rating: 2

Yeh CDMA is better.

In fact, the 3G GSM standard that is often hyped for data uses something called W-CDMA as opposed to the regular TDMA of basic GSM.

The BIG problem is that the CDMA system used in the US is proprietary - owned by qualcomm I think.

Japan uses a CDMA system but its ITU-standards based I believe.

The only reason I use Cingular is for GSM, so that I can use my phone when travelling - but once my contract is up I think I may switch to verizon (or more likely Amp'd), and just keep my old phone for travelling.

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RE: reception

By mAdD INDIAN on 1/29/2007 11:34:23 PM , Rating: 2

CDMA (the version used in North America anyway) is owned and patented by Qualcomm, and every phone that uses CDMA technology has to pay a royalty fee to Qualcomm.

As for GSM/CDMA, the quality & strenghts of both are relatively the same, it just depends on how the network is implemented by the service providers. CDMA really works well with the American-style of cellphone subscription which is based on long contracts (3yrs or so), since during that period the user normally sticks with one phone. In other parts of the world, its mostly pay-as-you-go where you "recharge" your SIM card when you run out of minutes.

I prefer GSM simply due to the use of SIM cards that allows me to switch phones if I have too while still keeping the same service. With CDMA, you are stuck with the phone the service provider gave you.

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RE: reception

By MDme on 1/29/2007 7:19:31 PM , Rating: 2

I don't know whether which technology is "better" than the other, but I can say from experience that:

In Europe and Asian countries (where GSM/3G) are prevalent, the service is second to none. NO dropped calls even in elevators or inside buildings.

In the US however (where I now live) GSM is crap. But I think it is due to the fact that the US is years behind in implementation of GSM technology here. And yes, I am on a crappy GSM network right now which I have to put up with just so that when I go to europe and asia I can use the same phone.

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OOPS!!!

By moisiss on 1/29/07, Rating: 0

RE: OOPS!!!

By UNCjigga on 1/29/2007 3:38:20 PM , Rating: 2

A $600 phone selling like crazy? What world do you live in?

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RE: OOPS!!!

By redog on 1/29/2007 4:02:57 PM , Rating: 4

He must live in the same world where a 600$ PS3 is supposed to sell like crazy.

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RE: OOPS!!!

By Russell on 1/29/2007 4:59:14 PM , Rating: 2

Or the world where $300 mp3 players sell like crazy.

He's right. The iPhone will be extremely popular, though obviously not as much as the iPod due to the higher price.

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RE: OOPS!!!

By Gholam on 1/30/2007 3:54:03 AM , Rating: 2

You do not realize the scale cell phone market operates at.

Nokia sold 900 million phones last year. Nine hundred million. 900,000,000. And the bulk of that are sub-$100 devices. Global market for cell phones numbers in billions per year. Apple to Nokia is like my 7-man computer support company to Dell.

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Verizon...

By superunknown98 on 1/29/2007 4:21:07 PM , Rating: 2

Has great coverage and clarity, but are control freaks when it comes to everything else. Have you ever noticed that now all verizon phones have the same OS. It's not so bad and it probably makes tech support much easier, but I would trust the manufacture to optimize the OS for their phone. This is probably one of the main reasons Verizon didn't agree to the deal. Apple would want to provide a signature MAC OS for the iphone, so it would be special and user intuitive. Verizon probably just wanted to throw it's crappy bland OS on it and call it a day.

The other thing is Verizon Doesnt let you transfer data across the bluetooth connection. How annoying is that. What they want you to do is either buy a 50 dollar usb cable, of bad quality, with some also of low quality software. Or you can download music from them and not only get charged for the song, but the data transmission as well. Apple on the other hand has iTunes, something Verizon can't control.

I still don't understand why this is such a revolution in technology. Phones have been able to play mp3's and wma's for what, over a year now? Is it becasue it has iTunes? I would rather just move the songs onto a memory card, like I do now, and slap it into my phone. If all thats so great about this phone is the 4 or 8gig's of memory, then thats pretty lame. Any phone with the right OS/firmware maybe hardware could support much more than that. I Guess it's bedcasue it's an Apple right?

RE: Verizon...

By Wightout on 1/29/2007 4:54:48 PM , Rating: 1

Have you read nothing about the phone? It runs OSX.

It is apple's new attempt at the Newton.

It is a palm pilot on steroids and can be used as a phone.

I think it was a smart move from Verizon not to go with a phone they wouldn't have access to as far as production goes.

When I listened to the Keynotes from this years Macworld and was horrified to find out that Cigular signed on to this without even seeing the phone. I personally believed that was stupid to make a point of, as it shows they had little to no control over what went on with your product. Not a smart move imo.

Much love to apple for this. I like the look of the phone thus far, I'm just sad Verizon wont be seeing this anytime soon (me mum works for Verizon so swapping isn't too likely for me).

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RE: Verizon...

By Gholam on 1/30/2007 5:20:52 AM , Rating: 2

I'm guessing OS X in iPhone has about as much relevance to desktop OS X as Windows CE has to Windows NT.

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RE: Verizon...

By SNM on 2/7/2007 7:44:35 PM , Rating: 2

The iPhone has widgets that are, so far as I can tell, the same as Dashboard widgets. It runs a full (if tweaked) version of Safari. It has pretty 3-d transitions. It looks like OS X and seems to actually have the same capabilities -- I don't remember exactly which features and APIs were enumerated, but it was all the important ones.

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RE: Verizon...

By solas989 on 1/31/2007 9:47:07 AM , Rating: 2

Yes Verizon are control freaks. However, I transfer data over bluetooth all the time on my VX8600 (mp3, ringtones, address book, sms messages etc not to mention stereo music with A2DP). All for free without having to buy anything from Verizon or getting different plans (basic family share plan). (b i t p i m)

Having the same general OS is quite logical to support, nonetheless annoying to the millions of customers. They are improving though by allowing different GUI layouts, but still...

I like the idea of 4/8gb because my phone is limited to 2GB, but it is a card so I can easily have 8+ gb of songs, just not all at once. The quality of my Verizon phone is SUPERIOR to Cingular/ATT here in Ohio. It is as good as Sprint, but Verizon has a larger coverage area currently where I am at. Plus Verizon gives me a 20% discount because of the company I work for...

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Grammer?

By UsernameX on 1/29/2007 2:55:33 PM , Rating: 2

quote:
Interestingly, Verizon Wireless does not support the GSM mobile technology, which Cingular and supports.

...and supports? Is it just me or does that not make sense? If it is grammatically correct, is it just basically saying Cingular supports GSM mobile technology?

RE: Grammer?

By Bonesdad on 1/29/2007 5:51:25 PM , Rating: 2

I think he simply forgot to type "T-Mobile".

Oh, and don't you mean "grammar"?

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RE: Grammer?

By InsaneGain on 1/29/2007 5:59:22 PM , Rating: 2

I think you're right and that's some bad grammar (grammar with an 'ar' not 'er')

And I have to agree that CDMA is a lot clearer than GSM. Also, whenever I talked to someone on a GSM phone from my CDMA phone, there would be a slight echo when I spoke. Really annoying.

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RE: Grammer?

By MobileZone on 1/31/2007 9:19:46 AM , Rating: 2

Clearer?? Echoes??

I can't believe this... You must be from Cingular or maybe Apple. Tell me!

(Motorola??)

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Diff'rent Strokes...Diff'rent Folks

By Rollomite on 1/29/2007 4:27:34 PM , Rating: 2

I have been a Cingular cutomer for over 3 years now. I rarely drop a call, I rarely have problems indoors, and I almost never have problems with my signal. Also, as far as exclusives, if I'm not mistaken the SE Walkman series were/are Cingular exclusives. I've got an W810i, which might not be considered a "bling bling" phone, but will do most of the things, if not more, than most "blinging" phones can do. I couldn't be happier with it. So before the flaming for cingular support ensues, realize that it's apples and oranges. Pick whichever you'd prefer to choke down.

Rollo

RE: Diff'rent Strokes...Diff'rent Folks

By hunter44102 on 1/29/2007 4:50:29 PM , Rating: 2

Same here.. I've had Cingular for 2 years and I've never had a problem in any buildings at all, and I've used 3 different phones. My company is in a brick/steel frame building and I've never had any connection problems.

Not to mention that I've used it at the Mall and other inside offices.

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RE: Diff'rent Strokes...Diff'rent Folks

By borowki on 1/30/2007 12:50:04 PM , Rating: 2

The old AT&T wireless part of their network is rubbish though.

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RE: Diff'rent Strokes...Diff'rent Folks

By mxzrider2 on 1/30/2007 10:45:59 PM , Rating: 2

ha, what a joke. here in Colorado, when cingular bought att the service went to dirt. it went from top tier service, the best in the area, to dead last in terms of reliability and quality. it was much better when it was the old att. me and my best friend, his family and about 15 other people switched off of cingular to sprint. best service in the area now.

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Thats a shame

By Macuser89 on 1/29/2007 2:29:01 PM , Rating: 2

I was hoping that Verizon would get the iPhone eventually, But this basically means they never will. It is kind of a crap deal for Apple to get money from the subscriptions and i don't blame Verizon for saying screw you. I also think that Verizon wanted some control over the software that you can put on the phone. The iphone appears like you could download software for it from anyone, Verizon would hate that idea. I like the idea of the iphone, but i hate the idea of using Cingular.

I sure wish the iphone would come to verizon....

RE: Thats a shame

By UNCjigga on 1/29/2007 3:36:33 PM , Rating: 2

Well I wouldn't hold my breath waiting for an iPhone on Verizon Wireless, but I wouldn't say "never" either. Depending on market success of the iPhone, Apple may come back with a device geared towards professionals and business users--and if they do that they might approach Sprint-Nextel and Verizon Wireless. Assuming their business phone can help drive data sales, Verizon Wireless may give them another look.

Yeah, it's a longshot, but it's possible.

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RE: Thats a shame

By MScrip on 1/30/2007 12:58:58 AM , Rating: 2

Now the bad news... If the iPhone came to Verizon, even 2 years later, it would still cost the same.

Apple products almost never lower in price.

The RAZR cost $300 at launch. Now they give them away free.

The iPhone will be $600 and launch, and will probably be $600 forever.

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verizon

By AppaYipYip on 1/29/2007 3:31:08 PM , Rating: 2

I hate Verizon. They are destroying the cell phone market by squashing innovation and continually raping customers. Why does my cell phone bill go up every few months? I love how I signed up for a $49.99 package yet pay more than $65 every month for a damn phone.

RE: verizon

By UNCjigga on 1/29/2007 3:47:54 PM , Rating: 2

Don't blame Verizon Wireless--blame the state governments and the FCC for not agreeing on a national fee-structure for all 50 states. If that was in place, we could advertise one monthly price and the only extra fees would be state tax. Verizon Wireless isn't the only carrier tacking on the fees either--every carrier's the same.

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RE: verizon

By Oregonian2 on 1/29/2007 7:16:54 PM , Rating: 2

My Verizon phone is month-to-month and each month has been about $15 for many many years now (IOW the year contract for the phone itself is long over). Not many minutes M-F daytime, but nights (starting at 7 or 8) and weekends have lots of minutes though. I hardly ever use many minutes over the limit. VERY plain low end Motorola phone, but works okay. Good for quiet folk like me. :-)

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Verizon 4ever!!

By CtK on 1/29/2007 3:48:28 PM , Rating: 3

Damn i love Verizon even more now!! Good job for turning down apple crap!!

Samsung D807

By kuyaglen on 1/29/2007 3:50:04 PM , Rating: 2

I've been with Cingular for almost 6 years now from the SF Bay area to Sacramento area and Portland Oregon I've had good coverage. As far as Verizon passing on Apple back then it would be the business descision but I think that Cingular to a risk that may payout. Apple customers are different from normal cell phone customers and will and do pay more for comperable equipment. Though I wouldn't rule out what happened with the PS3 to not happen with the iPhone.