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Verizon iPhone a 'fait accompli' as secret talks explained

updated 11:55 am EDT, Fri October 29, 2010

Verizon iPhone negotiations explained in detail

An iPhone for Verizon is coming early next year but only after the results of three years of talks, an unofficial look has revealed. Along with an interview with soon to retire CEO Ivan Seidenberg, sources have claimed that a CDMA iPhone 4 is a "fait accompli" but that resumed talks started as far back as December 2007, when AT&T was starting to see call drops and delayed messages even on its 2G network due to the iPhone load. Verizon's wireless chief, Lowell McAdam, is said by Fortune to have been making amends for the mistake of rejecting the iPhone earlier but also seizing on AT&T's weakness, which only got worse with 3G.

"We really ought to talk about how we do business together. We weren't able to [deal] a couple of years before, but it's probably worth having another discussion to make sure we're not missing something," McAdam said at the time. Jobs is claimed to have said the Verizon executive was "probably right" and that "we have missed something."

The new interpretation of events had Apple coming to Verizon as early as 2005 with phone plans but being turned away for the level of control it wanted over the launch. It would have prevented many of Verizon's third-party resellers from carrying the iPhone and didn't like Apple's plans at the time to share revenue rather than subsidize the phone up front. Verizon in 2005 was also at the height of its attempts to micromanage its phones, often disabling Bluetooth features to force users to pay for 3G services and insisting on custom software that would ship in place of, not in addition to, what the phone manufacturer made.

Seidenberg had stepped in personally in spring 2007 and had complained to Apple CEO Steve Jobs that Verizon was in the "doghouse" after the AT&T exclusive, only to be told that GSM was making the iPhone launch easier as it would let one model cover most of the world. The carrier chief pointed both to beliefs in his network's 3G quality and the then-upcoming plans for LTE-based 4G, which would give it the same networking as AT&T and most other carriers over time.

The phone itself is believed to be CDMA- and EVDO-only despite images of a SIM slot in view, though the removable cards may be to cater to Asian users. Verizon is claimed to be looking at bringing apps to tie into its services, such as the live FiOS TV viewing coming to the iPad. It already has a FiOS remote for iPhones despite no actual devices.

In the interim, Seidenberg has spent much of his time collaborating with Google, whose Android platform quickly ousted the BlackBerry as the preferred mobile OS on Verizon. He has tried to sidestep criticisms of a joint Google and Verizon proposal on net neutrality that would conveniently exempt the cellular business from regulation designed to prevent discrimination against competing apps. While critics have accused Google of "selling out" its ideals to court its favorite Android partner, Seidenberg in the interview was seen as conceding that Verizon needed a 'little bit of policing.'

For Apple, eroding the tight partnership is a key goal. AT&T's exclusive with the iPhone has kept it growing faster than Verizon even with major iPhone-related network trouble in New York City and San Francisco, but the deal is thought to have given Google a safe haven where it could get the unfettered attention and marketing efforts of a single carrier. Verizon is still the largest single driver behind Android growth, and an iPhone on the network would at least dampen the growth or even lead some to drop Android for an iPhone with their next upgrades.



By Electronista Staff
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Comments

  1. lklarson

    Fresh-Faced Recruit

    Joined: Aug 2001

    +3

    From our lips

    to God's ears.

  1. Bobfozz

    Fresh-Faced Recruit

    Joined: Jul 2008

    +9

    During that whole time

    Verizon was insulting Apple and Jobs... clearly Jobs' vision was way past Verizon's and Apple and AT&T made a lot of money that verizon could have made--but they used "stubbornness" in place of Best business policy. Their ego was alrger than Apple's but Jobs didn't care, Apple would be raking it in--hence his comment, to the effect of, "Yes, you are missing something." As Steve drove home I'm sure he was thinking, "Idiot."

    There is no proof, yet, that when Verizon gets a new load of users from Apple that they will be able to handle it better than AT&T did... none. I am a Verizon user and they too have bad days.

    Comment buried. Show
  1. testudo

    Forum Regular

    Joined: Aug 2001

    -10

    Re: During that whole time


    Verizon was insulting Apple and Jobs... clearly Jobs' vision was way past Verizon's and Apple and AT&T made a lot of money that verizon could have made--but they used "stubbornness" in place of Best business policy.


    Really? And yet Apple always uses stubborness as their best business policy. The fact that they won't bend at all on their products is a sign of that. So stubbornness pays at times.

    So I guess it's only if you're stubborn against apple that you're being stubborn?

    Their ego was alrger than Apple's but Jobs didn't care, Apple would be raking it in--hence his comment, to the effect of, "Yes, you are missing something." As Steve drove home I'm sure he was thinking, "Idiot."

    And if Steve couldn't get ATT on board, who would be the one missing something? For the iPhone would be stuck on T-Mobile or Sprint and suffering through either of those networks.

  1. facebook_Omega

    Via Facebook

    Joined: Oct 2010

    -4

    WTF?

    "Verizon is still the largest single driver behind Android growth, and an iPhone on the network would at least dampen the growth or even lead some to drop Android for an iPhone with their next upgrades."

    Is this wishful thinking on the part of elecronista? So this IS an Apple centric web site..I see.

    AnDROID DOES - iOS wishes!

  1. Jonathan-Tanya

    Fresh-Faced Recruit

    Joined: Oct 2004

    +3

    Subscriber growth

    If you look at Subscriber growth, and going all the way back to 2007 - if the story had been Verizon takes Android, AT&T takes iOS - the story is both of the largest two carrier grew significantly at the expense of the smaller carrier.

    But what happened is AT&T not only supports iOS, but also has the big Android headsets too - Galaxy S, HTC devices...that combined with the iPhone 4 launch, and recently AT&T is outpacing Verizon to the point they are near parity with Verizon.

    AT&T has caught up with the ever growing Verizon - that's an accomplishment.

    But this is not a weakness of Android - it's merely the fact that AT&T has been able to sell Android the whole time, thus creating the imbalance.

    Apple does need iPhone on Verizon - and on Sprint and on T-mobile, and on U.S. Cellular, MetroPCS, Cricket, Virgin Mobile, etc.

    So they are getting the other 'big' carrier soon, but the 3rd leg here is still "miscellaneous" because all those prepaid,non-contract, and regional carriers - taken in aggregate are the third 'majory' where Android is competing already, and iPhone is not present - at all.

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