It’s not just the revolutionary features that are causing the iPhone to make waves in the mobile world. Several analysts are also pointing to the way that Apple has launched the product, without making any concessions to Cingular, possible changing the market forever.
Apple forced Cingular to handle the release of the iPhone in totally the opposite way to a normal phone release. Usually the network is in control and bundles browser software and even has branding on the phone casing. With Apple they were in control and didn’t want any interference from Cingular.
Apparently Apple has negotiated to a deal to share a portion of the monthly revenues from subscribers, in contrast to the way manufacturers and retailers do business with mobile networks.
A report in the WSJ states:
Apple bucked the rules of the cellphone industry by wresting control away from the normally powerful wireless carriers. These service providers usually hold enormous sway over how phones are developed and marketed — controlling every detail from processing power to the various features that come with the phone.
Interestingly only 3 senior executives at Cingular were allowed to see the iPhone before it was launched.
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{ 2 comments… read them below or add one }
Zarch 02.19.07 at 6:44 pm
Cingular/AT&T has agent locations. These locations get paid for activations and upgrades.
They also get some residual for monthly fees.
My guess would be that phones sold in Apple stores would provide Apple (the agent location) some return. That might be the “portion of the monthly revenues from subscribers.”
Nothing radically new here, Apple has 120 store in the US and now the designer also distributes.
If a customer activates a phone in a Nokia store, does the same thing happen?
Bill Davis 02.22.07 at 7:18 am
“With Apple they were in control and didn’t want any interference from Cingular.”
I’d say the fact that they are not going to allow anything but approved 3rd party apps (that I’m sure you will have to purchase from Cingular) says that Apple did cave in some respects. A “smart phone” that doesn’t allow you to run your own applications isn’t very smart…