How Apple And Verizon Buried Differences To Launch The CDMA iPhone
The days of Verizon calling the iPhone “a tiara wearing digitally clueless beauty pageant queen” may now well be in the past. But the fact that it has taken close to four years for Verizon to announce the iPhone raises our curiosity levels about what transpired behind the scenes even further. Both Apple and Verizon are known to be companies that demand a high level of control on their products.
A recent article on Bloomberg Businessweek takes a deep look at the compromises that both the companies agreed to in order to bring the Verizon iPhone to fruition.
The article points out that one of the major areas of disagreement was with respect to branding and revenue sharing between the two companies. Apple initially sought a cut in the monthly revenues that carriers made from the iPhones – something that AT&T agreed to. Although this policy was replaced with the current model where carriers buy the iPhone from Apple and sell them at subsidized rates, BusinessWeek points out that Verizon’s refusal to budge away from their position may have cost them the iPhone in the early stages.
Also, Verizon traditionally stamps their logo on devices carried by them. This was counter to Apple’s policy of not allowing their products carry any other brand logo but theirs. The companies are learned to have reached an agreement over the years to not just keep the iPhone free of carrier branding, but also to not load the iPhone with pre-installed softwareÂ from Verizon.
The Businessweek article also throws light on the several other areas of partnership that the two companies engaged in to launch a CDMA iPhone. A number of Verizon engineers worked out of the Apple campus to help Apple understand their CDMA technology. Verizon also erected their cellular towers at Apple’s headquarters to enable signal testing and fix reliability issues. Apple and Verizon reportedly also agreed to swap confidential information about future roadmap with each other.
The partnership and negotiations were apparently handled primarily by Apple’s Tim Cook and Verizon’s Lowell McAdam with Ivan Seidenberg and Steve Jobs only offering occassional inputs. According to Jean-Louis Gassee, a former Apple executive, one of the primary factors that may have pushed Verizon into burying its differences with Apple could be the massive success of the iPhone, which has helped AT&T.
It will be interesting to see how successful the Verizon iPhone will be when it launches next month. What do you think?
[via Bloomberg Businessweek]
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