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Summary:

Time will tell whether Verizon made a huge mistake, or was rational: Verizon Wireless passed on the chance to be the exclusive distributor o…

Time will tell whether Verizon made a huge mistake, or was rational: Verizon Wireless passed on the chance to be the exclusive distributor of the iPhone almost two years ago, balking at Apple’s rich financial terms and other demands, this USAT story says, quoting Jim Gerace, a Verizon Wireless VP.
Among other things, Apple wanted a percentage of the monthly cellphone fees, say over how and where iPhones could be sold and control of the relationship with iPhone customers, the story says. All of these have been agreed to by Cingular, at least in parts.
The problem on distribution control? While Apple and Verizon stores would have it, Wal-Mart, Best Buy and other Verizon distributors could have been left out. “That would have put our own distribution partners at a disadvantage” to Apple and Verizon stores, Gerace said. Customer care responsibilities were also a big hitch.

  1. Does it mean that Carphone Warehouse has no chances to become iPhone distributor as they don't have network itslef? ;)

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  2. Buddy Coats, Jr. Monday, January 29, 2007

    Hooray for Verizon for looking out and protecting their Verizon distributors! It's good to see some companies still have high ethical standards and will be willing to sacrifice reveue (if need be) to maintain high ethical standards.

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  3. Ethical standards? I doubt it. This was a pure business decision weighing a number of factors including but not limited to distribution.

    Had the financials swung in favor of carrying the iPhone they would have done it in a heartbeat…Apple was asking for a lot and I am not surprised Verizon balked.

    I take this story as a clever means for Verizon to look galant in front of their distributors while raising a flag to Cingular distributors. Classic Sun Tzu – The Art of War tactics.

    What will be interesting is the pandora's box (especially for Cingular) this opens for other handset manufacturers who might now want special treatment for their latest gizmos.

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