News is emerging today that Verizon Wireless, the second largest US cell phone network, passed on the opportunity to be the exclusive iPhone distributor two years ago.
Verizon are understood to have had lengthy discussions with Apple but decided that the deal was not “mutually beneficial” to them. Apple had apparently requested a percentage of monthly cell phone fees as well as control over where and how the phones could be sold and a relationship with the users.
Most people had thought that Cingular were very lucky to be given the rights to the iPhone. Its not often that a premium product is guaranteed to attract huge sales volumes like the iPhone is promising.
Apple and Cingular have not released details on the terms of their deal but Steve Jobs has insisted he retains control over how the iPhone is distributed. Previous comments by Apple indicated that they chose Cingular after the two companies worked well together in the production of the Motorola ROKR with its iTunes integration.
Apple invest a lot of money in marketing their products and to lose control over distribution could allow the iPhone to be sold at a discounted rate in stores such as Wal-Mart or Best Buy, both Verizon partner stores. Verizon quite understandably didn’t want to prejudice their current relationships with some of the largest stores in the US.
We understand that Apple also wanted complete control over the customer care aspects of the iPhone and insisted on making the final decisions on whether faulty phones were replaced or repaired.
