January 29, 2007 11:43 AM PST

Verizon Wireless passed on iPhone two years ago

Verizon Wireless could have been the first wireless carrier to offer the Apple iPhone, but the mobile carrier passed on the opportunity because Apple's financial terms were too steep, Verizon said Monday.

Denny Strigl, president and chief operating officer of Verizon Communications, said the iPhone will help draw attention to the whole mobile-music movement, but he said he was glad Verizon passed on the opportunity. Verizon Wireless is jointly owned by Verizon Communications and the European wireless carrier Vodafone.

"The iPhone product is something we are happy we aren't the first to market with," he said during Verizon Communications' fourth-quarter 2006 earnings call on Monday.

USA Today first reported Monday that Verizon Wireless had passed on the iPhone two years ago. One of the big sticking points for Verizon was the fact that Apple wanted control of the distribution of the product. Specifically, Apple only wanted to sell the iPhone through Verizon stores or the Apple retail stores, locking out other Verizon distributors such as Wal-Mart and Best Buy.

"We have great distribution partners nationally, regionally and locally," said Jeffrey Nelson, a spokesman for the company. "And the deal they (Apple) wanted would have frozen out those partners. So we said, 'No thanks, not under those conditions.'"

Apple also supposedly wanted a percentage of the service revenue from iPhone users, the USA Today article said. When Verizon declined Apple's offer, the iPod maker went to Cingular Wireless, now owned by AT&T.

Earlier this month, Apple announced that the new iPhone would be available on Cingular's network starting in June. The phone will come in two versions, a 4GB model for $499 and an 8GB model for $599. And even though Cingular and Apple each sell products through other retail chains, such as Best Buy, the iPhone will be sold exclusively through the Apple and Cingular stores as well as on their Web sites.

So far, neither Cingular nor Apple has disclosed financial details about the deal, such as how long the exclusivity contract will run.

Representatives from Cingular and Apple declined to comment on Verizon's claims that it had been approached first to sell the iPhone.

"Apple chose Cingular because it's the best, most popular carrier in the United States," said Natalie Kerris, a spokeswoman for Apple.

See more CNET content tagged:
Cingular Wireless, Verizon Wireless, Verizon Communications, USA Today, Apple Computer

73 comments

Join the conversation!
Add your comment
Cingular = Low Quality (Link)
Cingular's J.D. Power customer satisfaction ratings are way below those of T-Mobile and Verizon.

<a class="jive-link-external" href="http://www.jdpower.com/telecom/ratings/wireless/index.asp" target="_newWindow">http://www.jdpower.com/telecom/ratings/wireless/index.asp</a>

The last time I looked at Consumer Reports, they also rated Cingular pooly.
Posted by john55440 (1020 comments )
Reply Link Flag
Don't believe the ratings
That may be what the ratings say, but from personal experience in the area I live, the quality is far better than the other carriers.
Posted by wayaadisi (2 comments )
Link Flag
Don't Trust the ratings!
I've had Voicestream, U.S. Cellular, Verizon, and now Cingular. I've been with Cingular for 6 years and I've yet to have an issue. I can count my dropped calls over 6 years on 1 hand. I'm in the military and I've been out in the middle of nowhere and still got a signal when no one else could. People often borrowed my phone to call there families. You don't become a successful carrier by having crappy service. Heck I even got service once when I was on the Metro in Washington D.C. and we were underground.
Posted by cdtphilpot (569 comments )
Link Flag
Amazing
Apple wanted to design its own phone and interface without the
MCSE bozo engineers at a phone company chiming in?

Who'da thunk it?!
Posted by tedk7 (66 comments )
Reply Link Flag
Two posts is all it took for the troll to appear
The story doesn't mention Microsoft in any way and yet you immediately start trolling.

Sad.
Posted by Vegaman_Dan (6683 comments )
Link Flag
Two posts is all it took for the troll to appear
The story doesn't mention Microsoft in any way and yet you immediately start trolling.

Sad.
Posted by Vegaman_Dan (6683 comments )
Link Flag
Verizon = American short-sightedness.
If Apple had engineered the iPhone for Verizon, they would have
been locked into creating a product that would be virtually
useless to most of the rest of the developed world. CDMA is a
solid technology that produces great results, but the simple fact
is that there's so few power-hitter CDMA providers outside of
the United States and, even if there were more, US CDMA
providers haven't done so well at providing inter-operability with
the other CDMA providers out there. If you go to Verizon's
website and look up International Roaming (with a CDMA
handset), you'll find quite an impressively long list of places to
use your phone... until you remove the names of all the cruise
ships. I use Cingular, and I was able to take MY Treo 650 (not a
rental or borrowed phone) to the UK, Poland, and even humble
and downtrodden Belarus. The result: total interoperability with
no effort on my part (voicemail, SMS-text messaging, voice
calls). So, besides the fact that a Cingular customer will be able
to carry his/her iPhone just about anywhere and make it work,
Apple has now already done all the grunt work to ensure that
their product can be sold and/or used by all the meaningful
providers abroad, depending on what exactly their contract with
Cingular stipulates concerning sales outside the US. There's a
reason Nokia's pulling out of making CDMA handsets. This is
precisely why.
Posted by XenophonJones (19 comments )
Reply Link Flag
Verizon is the most successful wireless provider in US...
...and Apple the amount the most arrogant companies.
Posted by FutureGuy (742 comments )
Link Flag
Verizon is the most successful wireless provider in US...
...and Apple the amount the most arrogant companies.
Posted by FutureGuy (742 comments )
Link Flag
No, Dad got hosed
Talk about killing two birds with one stone, what a snipe from Verizon. This makes Cingular look desparate and Apple look like a kid that got turned down for a prom date by the best looking girl in school.

This makes me think that if the iPhone is not a huge success, it will not be based on merit alone. The device may be killer but that is just one part of the puzzle for success.

Verizon may also have a play of its own to make here, given that they had two years notice about what Apple was doing. This could get interesting.
Posted by NewsReader_ (280 comments )
Reply Link Flag
Apple wanted too much control...o rly?
I find VZW's statement that "Apple wanted too much control" really hard to believe given the iron grip VZW has on the devices they allow on their network -- crippled Bluetooth, standardized UI, etc.

I'm still amazed that T-Mobile, whose phone selection has always been lackluster at best, passed on it (assuming that were even given the opportunity, which they very well might not have been...their large coverage gaps in the Carolinas etc. might have scared Apple off.)
Posted by roamer1 (2 comments )
Link Flag
Verizon is sitting this one down.
Writer writes: "Verizon may also have a play of its own to make
here, given that they had two years notice about what Apple was
doing."

I don't think so. Cingular agreed to the Apple deal without
seeing the iPhone for the two years of its development. So
Verizon has two years to catch up and even then they have a lot
of R&#38;D to get something as sophisticated as the iPhone in the
way of integration and userability.

Also, don't forget the patents Apple has on the iPhone. The best
Verizon can hope to do is what LG and Microsoft are doing--
offer pseudo iPod and iPhone imitations. They look like the real
thing on the outside but don't work nearly as easily, elegantly
and seamlessly.
Posted by halesgarcia (29 comments )
Link Flag
gotcha
it is so interesting to see all these comments talking about
Apple, being the gateway to heaven, or it being the door to hell,
and Cingular this and that...

god! the reason for this story was just to put Verizon in the glory
list because "they care for their partners". done... good for
verizon...

it's so sickening when all this crap is thrown around, I mean,
yeah, in all fairness, there are some comments here that are
worth while and are of the subject... but when Microsoft, Apple
or Linux, for that matter, are thrown into the mix, here come the
anti- this and pro- that, and then the whole thread is turned to
the everlong discussion of "which's the best business?",
completely missing the point of the article

Verizon didn't get in because Apple wanted to control their
product in a manner that wasn't compatible with Verizon. Call it
closed-minded, call it protective; that's how Apple does
business, and it has worked for them. Verizon came out being
the safe and loyal business partner with its distributers, and
Apple the control freak... but, remember IBM and CP/M?
remember how that turned out? (No? Go read). I'm not saying
Verizon did wrong here (I think I would've done the same thing);
I'm just trying to give a little a perspective here.
Posted by balkce (32 comments )
Reply Link Flag
VZW said no because they INSIST on locking our phones!
The iPhone is a revolution in technology and user interfacing with mobile technology. The iPhone has reinvented the "smart phone" with an amazingly easy to use (and aesthetically pleasing) user interface, and new technologies previously unseen in mobile phones (gravitation sensors, full touchscreen multitouch screen, uninhibited wifi browsing and Google Earth/Maps integration). Verizon locks all of their equipment to the horrible "Red" standard UI, which is comprised of keeping us consumers strapped for features. Verizon blocks certain bluetooth profiles on ALL of its handsets in an effort to make us, the users, pay for their data services as opposed to using the technology already built into the handsets we've bought and OWN (Google "Verizon OBEX" if you don't know what I'm talking about). Verizon locks down all of their handsets with sub-par user standard user interfaces and locks technology already built into the handset from manufacturers. Apple would never allow VZW to butcher their device, and Verizon would never allow Apple to market such a fully featured device on their network without being dreadfully submerged in BREW/GIN. I for one am very glad VZW never got their greedy paws on the iPhone. The device we would've seen would have been drastically different than the device Steve showed on stage in January.
Posted by mongoos150 (51 comments )
Reply Link Flag
Totally agree
But look out, the passionate fanboys might label you a troll!
Posted by tedk7 (66 comments )
Link Flag
Verizon will be kicking them self...
Verizon will be kicking them self in the @ss when they see Apple sell a hundred times more iPhones then Motorola Sold RZs (RAZR, KRZR, RIZR...) while Cingular takes a big chunk of there customers.

(Since Verizon wireless is the only service available in my part of Maui, this really sucks for me...)
Posted by MauiMac (27 comments )
Reply Link Flag
Verizon won't be regretting anything
Look at the marketplace. They already offer phones that do everything the new iPhone offers and at a fraction of the cost. Since the iPhone will not allow any sort of discount or rebates, then people will have to lay out half a grand for a phone that won't do what other phones on the market can for half or less than that.

AT&#38;T passed on the iPhone. Cingular started their negotiations with Apple before being merged and now that AT&#38;T is in charge, how long do you think this partnership will last? All it will take is Motorola or LG or another hardware company to sign an exclusivity deal to only offer their brands through Cingular and then Apple will be left out on the sidewalk since they really cannot compete. That would really be bad because those phone owners won't be able to use their phones for anything but very very VERY expensive low capacity music players.
Posted by Vegaman_Dan (6683 comments )
Link Flag
If Verizon is so bad why did Apple go to them
Apple wanted Verizon but they wanted and needed their (facist) control even more.

Apple will sell lots of phones to the fanboys and others but ATT will make almost nothing. In fact I am willing to bet - the phones will be lost leaders for them.

Jobs will make millions in stock options, more chinese teens will be exploited, and fanboys will spend their parents money.
Posted by nutjob (130 comments )
Reply Link Flag
better customer feedback
going Cingular made sense because of their size, maybe Verizon
had better customer feedback so the reason Apple asked them
first? Well *** am I replying to you, youre a windows troll and a nut
job :P
Posted by BobBobBobBobBobBobBob (49 comments )
Link Flag
The one reason Apple went to Verizon - 3G
The only reason for Apple to have even considered Verizon as a
partner with the iPhone is for their 3G data network. By keeping
the older CDMA network in place and not upgrading to the
global GSM standard, Verizon has THE widest area high speed
wireless data network in the US. Sure the iPhone is only using
GPRS/EDGE out of the box, but like the new MacIntel computers,
the iPhone will probably be software upgradeable to 3G UMTS
when Cingular finishes the rollout. A LOT of the cool features
and tools in the iPhone will only be made better by access to a
high speed data network, but the only one currently available is
tied to old, proprietary technology.

The decision for Verizion to not have the iPhone was most likely
a mutual one with Apple, rather than Verizon trying to look after
their customers' best interests. Apple didn't want to see the
iPhone in WalMart, and Verizon didn't want all of the
functionality of the iPhone to be enabled.

This isn't a Mac vs. Windows, or even a Verizon vs. Cingular
debate, it's Verizon trying to garner more investor confidence in
the months before the iPhone causes mass exodus away from
their network. Will it put Verizon out of business? Doubtful, but
they want to hold on to their investors and customers for as
long as they can.
Posted by bigjoe72 (16 comments )
Link Flag
Yes
True, especially the last two points.

Oh and since when did criticizing Apple's products automatically earn you the label of a Windows troll?
Posted by Ed-duh-win (60 comments )
Link Flag
Yes
True, especially the last two points.

Oh and since when did criticizing Apple's products automatically earn you the label of a Windows troll?
Posted by Ed-duh-win (60 comments )
Link Flag
Contol Freaks
First, I've been with VZW since they bought Airtouch out in CA.
Since then I've brought at least 30 friends and family to VZW. I
have been happy with them as my service provider.

As for Strigl's comments they sound like sour grapes for a poor
decision. Apple and VZW are both control freaks. For example,
VZW kept clients waiting almost a year before they sold the Treo
650 and did the same with the Kyocera 7135. The reason given
by VZW's reps was concern over the experience customers would
have so we had to wait. Sounds like a company in Silicon Valley
that VZW is proud that it snubbed.

VZW dearly wants to control all music bought through their
service. iTunes would mess that up and take away $$$ from VZW
music sales at a $1.99 a song instead of the $0.99 charged at
iTunes. My son and his friends don't want V Cast, at the ages of
19 to 24 that would seem to be a prime demographic VZW
wants.

Apple succeeded with the iPod by controlling the whole
experience. It seems they would want to make sure the initial
experience with the iPhone is the same as the iPod. Hitting a
kiosk at Wal-Mart or Best Buy doesn't fit that goal.

When the iPhone is released we're going to switch. Every review
(done by those that have actually used the phone) has been very
positive. If I and others drop $500 to $600 for a high end phone
then the price point for the iPhone isn't out of line. As for my
son and and his friends (who all own high-end phones $300
plus) they are already planning when and how they will switch to
get an iPhone.
Posted by tatter.demalion (5 comments )
Reply Link Flag
ipod, i-shmod, izune..all the same
I was long time reading the comments about, iPods and Apple and MS, and phones.
I have few thoughts.
A lot of people think, that somehow the iPhone will revolutionize the cell-phone industry , but , I do not think that there is not really much it can bring to the market except more money for Steve Jobs from the stupid crowd , that worship everything he does.
First of all, I hate he hypocrisy, that Steve Jobs has . He steals the Cisco trademark "iPhone ",and claims , that it is now common word in English, and at the same time, he ready to kill anyone who even thinking of making a design similar of his products.I do not like his products because he is no better that his evil-big-brother Bill Gates.He is actually a mini-Me( Bill Gates), trying to lock people in his proprietary technology, instead of Bill's. For the same reason I hate Verizon. I been Verizon customer for 12 years, and I switched to Cingular last fall.
I use Sony Ericsson's P990.
This product is not a "Gods gift " to mankind, but is in much better , than any product Steve or Bill can ever offer me. Let me tell you what I got for $650.
1. GSM plus 3G ( not available in NJ now , but some day I hope).
****** , buit-in modem, USB2,FM Radio, Mp3 etc.
3. I can send from my phone Mp3 or any other file to any other compatible device (except Zune and iPotz) 3 different ways. By Wi-Fi, Bluetooth( Hello Verizon),and IR . NO RESTRICTIONS !!!!!!!!
I do not like anyone ( Steve or Bill or for that matter US Congress to tell me ,how I can use the music I purchased !!!)
4. I use 4GB, Memory Stick Duo , but 8GB is coming next month and 16GB and 32 after that.(He goes your 30Gb iPod.) I do not need 30GB in my phone anyway.
5. I already have internet,, RSS, email ( I can read my Gmail, do IM ,and Google Talk).
6. Phone has 2mpx camera and all other "bells and whisles". Symbian OS , etc. It has some bugs here and there, but one of the best phones I ever seen.
I am not here to do advertising job for Sony-Ericsson ( SE) , but tell me how Steve can convince me to switch ? Everybody I know , hates touch-screens. I use mine only if I cannot use the buttons. I think Steve decided to join the phone market , because he sees ,that the cell phone industry is the biggest threat to his iPods.
Cell phones are sold in hundred of millions. The 5th cell phone company sells more Mp3 players, than he sells his iPods. One day people realize , that they do not need iPod, because you can listen music with your SE Walkman , no wonder SE includes headphones with every box and the company growing, already 4th on the market, read another article on Cnet today.
I am very skeptical about this iPhone "miracle".
Sony made a mistake , when they tried to push this ATRAC format and lost time. Now they slowly moving
up , by removing restrictions . They support Mp3, AAC, etc. Sony was great with walkmans because there was no restrictions . Here is free advice to Sony. Drop this ATRAC idea , start selling on your Connect service unprotected Mp3s for 50 cents and you will kill iPod and iTunes in a week.
Posted by kritik1 (1 comment )
Reply Link Flag
$650 OMFG!!
LOL I cant help but laugh at this stupid phone and yes, I've seen it
first hand, I cant get over the fact that it's over an inch thick and
lags like hell clicking at the icons. I hope you go blind trying to
read web pages on the tiny 240 x 320 pixel screen and cant zoom
in... only the 3 hours battery life will save you.
Posted by BobBobBobBobBobBobBob (49 comments )
Link Flag
control freaks is right, apple is too demanding
i love some of their products. i own a nano, and i edit video on a mac pro at work, but really, even if they make good products, who do they think they are, anyway?

apple's are beautifully designed and never crash, which is great, but don't doubt for a second that they would be a worse evil empire than microsoft if they had the majority of the market share. i mean, they force their customers to do things exactly how THEY want them to do things. where's the user's freedom in that? this phone is no different. this is just like sony with all their drm crap, taking away their user's freedom.

i'm a mac user but i dislike both apple and microsoft as companies. believe it or not people like me do exist.
Posted by cyde01 (115 comments )
Reply Link Flag
Stop and think
&gt;i love some of their products. i own a nano, and i edit video on
a mac pro at work

Do you really think that using your mac for video editing would
still be great if Apple let verizon design the interface for your
program?

"Control freak" is one thing, but seriously, the ONE thing apple is
know for us its user interfaces... I say it's completely fair for
them to keep it that way, and doing business with verizon
doesn't make sense if verizon made then trash the iphone.
Posted by tedk7 (66 comments )
Link Flag
Verizon as greedy as any of them
Sure, Apple may be demanding, but what about Verizon? They passed on the deal because they too wanted too much control - and money. I'm with Verizon now b ut plan to drop them when my contract is up because they are by far the most expensive out there, and I don't think the premium is worth it. They dropped the deal because they're greedier than even Apple.
Posted by macdaddy3 (6 comments )
Link Flag
anyone home?
earth to cyde01... the post "control freak" is referring to Verison's
control and wanting to charge $1 more per song over iTunes.
Nothing wrong with Apple wanting buyers to have a better user
experience.
Posted by BobBobBobBobBobBobBob (49 comments )
Link Flag
It's the User Stupid
The iPod changed the way we look at music. Every indication is that the iPhone will do the same for mobile. This is not about being loyal to a specific brand or carrier, if you can meet my needs while providing a rewarding experience, I'm sold.

I'm switching my family's plan from Verizon to Cingular (AT&#38;T) when the iPhone comes out. It's Verizon's job to create a reason for me to switch back.
Posted by btrogdon (13 comments )
Reply Link Flag
US mobile phone's tight grip over their helpless users
I already have Cingular and ready to replace my Treo650 when the
iPhone comes out... it's nice that Apple is loosening the US mobile
phone's tight grip over their helpless users.
Posted by BobBobBobBobBobBobBob (49 comments )
Link Flag
some are missing the whole point
that with iPhone, Apple is giving more control to the mobile phone
user... it's sad but some just dont know what's good for them.
Posted by BobBobBobBobBobBobBob (49 comments )
Reply Link Flag
A Phone that runs OSX, that's a no brainer
iPhone... a phone that literally runs OSX on it. Full ipod built in with the most revolutionary touch screen the world has seen to date. This is a phone where everything can be upgraded with a software update. This is what I have been waiting for since 1995. It's long overdue for cell phones to get the technology bump they have always deserved.

I don't think the general moron masses of idiots out there can grasp just how big of a deal this device is. Well morons, this is a wearable computer... yes, running Apple's flagship Operating System. Apple is introducing it as iphone, mainly because that is as much as you little brains can comprehend. This device changes everything. After this device comes out, your treos and blackberries are only going to be as good as their vibrate features.
Posted by cre8tiv369 (4 comments )
Reply Link Flag
Do you really believe this?
You honestly believe that a computer - one that doesn't even allow
you to install unauthorized 3rd party software - is going to change
your life? I guess it might if you've been waiting 12 years for this
but I can't see how it will change the lives of average people.

I mean really, what does it give you that is life changing and earth
shattering?
Posted by rapier1 (2722 comments )
Link Flag
Wow wow wow
Wow easy there buddy. Running OS X on a mobile phone with a tiny screen is not going to change your life - in fact I think it will make it more of a thing called "pain". Try browsing the net with PSP - that's the experience. Your battery will die in 5 hours listening to music and showing off your color screen with bright backlight and touchscreen keyboards, while Treos ad Palms will still be running strong into the 15th hour.

Honestly, do you believe all this from Apple? The notorious maker known for control, blame-shifting and false ads?
Posted by Ed-duh-win (60 comments )
Link Flag
wow oh wow have the tables turned...
Posted by senajafi (34 comments )
Reply Link Flag
 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.