Apple Requires Comcast and Charter to Sell iPads and Apple TVs as Part of iPhone Deal

[MacRumors]

As part of the deal allowing cable companies Comcast and Charter to sell iPhones for their respective mobile services, Apple has required them to also sell large numbers of other devices, reports CNBC.

Both Comcast and Charter have wireless services as part of an MVNO agreement with Verizon. Comcast offers Xfinity Mobile with approximately 1.5 million subscribers, while Charter offers Spectrum Mobile with approximately 300,000 subscribers.

The two cable companies wanted to be able to offer the iPhone in an effort to better compete with the four major carriers in the United States -- Sprint, Verizon, AT&T, and T-Mobile -- and as part of the deal allowing Comcast and Charter to sell iPhones, Apple made them agree to sell other devices too.

The iPhone's popularity made it impossible for Xfinity Mobile and Spectrum Mobile to compete without offering it, according to CNBC's sources, which meant Apple had "ample leverage" in deal negotiations.

Specific terms of the two deals are not known, but Comcast is required to sell a certain number of iPads, which CNBC says is in the thousands, at a subsidized cost. Comcast is required to pay the difference between the discounted price and the retail price.

Comcast offers the cellular 6th-generation iPad for $422.99, a discount from the standard $459 price. Comcast also sells cellular versions of the 10.5-inch iPad Pro, the 10.5-inch iPad Air, and the 7.9-inch iPad mini, all at discounted prices.

Subscribers are promised a $15 per month credit applied to their monthly statement for any iPad purchased.

Charter's deal is different and involves the Apple TV, which Charter offers as an alternative to a traditional cable box.

Charter sells Apple TVs at $7.50 per month for 24 months - or $180, the retail cost of an Apple TV. Alternatively, a customer can lease a Charter set-top box for $7.50 per month. In other words, Charter offers an Apple TV at the same price as a Charter set-top box, but a customer ends up owning the Apple TV and returning the Charter box. Charter has become the largest third-party seller of Apple TVs because of the agreement, two of the people said.

According to CNBC, there are benefits in these deals for Comcast and Charter beyond being able to offer the iPhone. iPads and Apple Watches "enhance the value" of the Comcast wireless service, and the Apple TV offers a better navigation interface for Charter customers.

Many of Apple's carrier partners around the world also sell Apple devices other the iPhone, much like Charter and Comcast.

Article Link: Apple Requires Comcast and Charter to Sell iPads and Apple TVs as Part of iPhone Deal

 

[57004]

I'm sure that Charter box is not much good after closing the subscription. Same as IPTV modems here in Europe. They're too customized and can't be used with any other carrier. So it makes sense to return it, at least it doesn't get dumped in the trash.

 

[nt5672]

Things must be getting bad for Apple sales to force this.

 

[dwman]

I hope Apple made Comcast offer zero sign-on as part of the agreement.

 

[ersan191]

How about you require them to support Apple Watch too so I can switch.

 

[mannyvel]

That would be illegal tying if Apple were a monopoly.

 

[JetTester]

Love it! Apple dictating terms to the monopolistic cable companies. What goes around comes around!

 

[UnusedLoginID]

Love it! Apple dictating terms to the monopolistic cable companies. What goes around comes around!

Comcast and Charter are tiny carriers who don’t have their own infrastructure hence their agreement with Verizon. They’re in no way “monopolies”.
The agreement is purely around the cellular service, not around the Internet or TV part… which I agree make Comcast and Charter monopolies but Apple is not dictating anything to them in that regard.

 

[TracesOfArsenic]

That should get Timmy's spreadsheets looking healthier!

 

[ikramerica]

How about you require them to support Apple Watch too so I can switch.

Yes please.
[doublepost=1560465166][/doublepost]

Comcast and Charter are tiny carriers who don’t have their own infrastructure hence their agreement with Verizon. They’re in no way “monopolies”.
The agreement is purely around the cellular service, not around the Internet or TV part… which I agree make Comcast and Charter monopolies but Apple is not dictating anything to them in that regard.

But cable companies are used to negotiating must carry contracts and forced bundles by content providers. They likely didnt blink at this.

 

[jinnj]

That would be illegal tying if Apple were a monopoly.

It's not illegal because it's been on going for decades. Except before it was the carriers that set the terms on the phone manufacturers. Remember this was when Verizon laughed in Steve Jobs face and told him to get lost. No iPod would ever get on their network. Fast forward 4 years later and they were begging Apple to make a compatible iPhone. AT&T agreed to the terms because they were dying.

 

[SRLMJ23]

I love using my AppleTV to watch television, and do some other things. However, if I am getting an iPad/iPhone/AW+LTE, it is going to be with AT&T whom I have been with for 19-20 years and get a 30% discount with because I work at a hospital and AT&T gives us New York State Employee accounts. I also do not have to pay any activation fees with my NYS Employee Account, and I get some benefits with DirecTV NOW, like free HBO and a couple others. Until any other carrier, including Spectrum can beat that, I am staying put.

Anyway, on to the real reason I am writing this post. It is to let people in New York State that may not know, Spectrum owes you money that you are supposed to be starting to get back now, as well as getting some free services, ranging from one month, up to six.

My main service is DirecTV NOW. However, because I live in New York State and Charter/Spectrum overcharged a lot of people on their bills and never paid them back, along with a rather long list of other things that Charter/Spectrum did to cheat NYS customers, Charter/Spectrum was going to get kicked out of New York State. Of course Spectrum made a deal with the New York State government, and if you qualify, you can get up to six months free of their streaming service on AppleTV. You get Showtime for six months, or you can pick HBO (I already get that for free through DirecTV NOW) but you only get that free for three months...makes no sense really...but whatever. You also get to pick 10 channels, not including your locals to be part of what Spectrum calls the "TV Choice Package."

Only reason I did it is because it is free and it is the deal they made with NYS to be able to stay in the state! I have no clue how it was determined I would get the extended six months of free "TV Choice package" because I never got ripped off by Spectrum as far as my bill. Maybe something happened behind the scenes that I do not know about, or more than likely I just got lucky. Could have had something to do with them advertising and charging for internet speeds they could not physically even offer.

Anyway, sorry for getting off topic. I will say that DirecTV NOW has better picture and sound than the Spectrum streaming app. The ONLY thing that the Spectrum app has on DirecTV NOW is that it has ALL my locals, whereas DirecTV NOW has a whopping ZERO!!! Until this Spectrum "TV Choice" package was brought to my attention, I would get my local CBS through CBS All-Access which was alright as I still got my local news. I have now cancelled that until this Spectrum offer ends or hopefully DirecTV NOW gets my damn local channels...at least ABC by college football season, please!!! This free Spectrum saved me with the NBA Finals this month.


Per this article: https://www.newyorkupstate.com/busi...d-when-can-customers-expect-their-75-150.html

"In addition to the refunds, Charter is required to offer more than $100 million in free video and streaming services to about 2.2 million active internet subscribers;

• Charter will offer all subscribers currently receiving internet and cable television from the company a choice of either three free months of HBO or six free months of Showtime. (This benefit is available to subscribers who do not already subscribe to both HBO and Showtime through Charter.)
• All other active Charter internet subscribers will receive a free month of Charter’s Spectrum TV Choice streaming service , which provides access to broadcast television and a choice of 10 pay TV networks, as well as a free month of Showtime."

I know in that quote for the article, it says if you only have internet through Spectrum, you get one month free of the TV Choice package. However, I have been on the phone with them several times this past week to make sure what they are telling me about getting this for six months is not some error (and I will end up getting charged at some point) and all the customer service reps have said that many accounts have been extended past the original one month free.

TLDR: Basically, if you live in New York State and had Spectrum for internet, TV, and home phone or just internet, make sure you are taking advantage of what is legally available too you because Spectrum wanted to screw over and lie to its customers! You have money coming to you, as well as free services that you get to pick depending on what type of services you had with Spectrum previously.

 

[mannyvel]

It's not illegal because it's been on going for decades. Except before it was the carriers that set the terms on the phone manufacturers.

FYI, just because it's been going on for decades doesn't mean it's legal.

Also, how carriers behaved isn't necessarily tying. Tying is forcing someone to take product B when they want product A. Illegal tying is when you have enough bargaining power to force vendors to take product B even though they want product A. Carriers wanted exclusivity and control.

And yes, I remember the old days. You've forgotten that the iPhone was actually on Cingular, which was bought by AT&T before the iPhone release.

Example tying: Microsoft and IE back in the day, forcing people to buy Windows licenses for each computer shipped even though the computers didn't have Windows on them.

I suspect that Comcast and Verizon may have a pretty good case if they wanted to take Apple out for illegal tying.

 

[Edsel]

I hate Charter. They are desperate to remain relevant other than supplying access to the internet. Had their cableTV for twenty years. I gave it up when they kept moving channels around their 2000 channel lineup.

 

[Naraxus]

Not really sure why this is news. Doesn't Apple also require this from telcoms?

 

[MauiPa]

Things must be getting bad for Apple sales to force this.

Kind of inane thing to say. You read the part where they sell the other devices at most carriers right?

Free market, you negotiate
[doublepost=1560470672][/doublepost]

FYI, just because it's been going on for decades doesn't mean it's legal.

Also, how carriers behaved isn't necessarily tying. Tying is forcing someone to take product B when they want product A. Illegal tying is when you have enough bargaining power to force vendors to take product B even though they want product A. Carriers wanted exclusivity and control.

And yes, I remember the old days. You've forgotten that the iPhone was actually on Cingular, which was bought by AT&T before the iPhone release.

Example tying: Microsoft and IE back in the day, forcing people to buy Windows licenses for each computer shipped even though the computers didn't have Windows on them.

I suspect that Comcast and Verizon may have a pretty good case if they wanted to take Apple out for illegal tying.

Doubt it. They freely entered an agreement. You would be right only if they had on record that they absolutely did not want to sell other products. But they probably have a good deal on the iPads, and if they don't sell, they probably can return them.

 

[Baymowe335]

Things must be getting bad for Apple sales to force this.

Geez, can we stop with the always speculative doom and gloom nonsense?

This is normal business, just like pricing changes, promotions, etc. Welcome to Wallstreet where you consistently have to sell more stuff in the same period of time.

And guess what? Are Comcast and Charter American companies? Revenues in the Americas region hit all time records. Apple is NOT struggling in the US.

Almost all of their sales pressure has come from China. They still managed to put up $60B in PROFIT in 2018, or more than twice Google, as an example.

Apple is THE most profitable company in the world and doesn't need tips on sales execution. They are THE best at making money and this is just another way to do that.

Hate on though.

 

[cpfoto2005]

Things must be getting bad for Apple sales to force this.

Bundling additional products with the "hot" product isn't uncommon in wholesale deals and doesn't necessarily indicate good or bad overall sales.

I think one could argue that this is a win-win situation for Apple and for Comcast/Charter. The cable companies can sell additional data plans for the iPads and charge retail price for the Apple TV.

 

[realtuner]

Also, how carriers behaved isn't necessarily tying. Tying is forcing someone to take product B when they want product A. Illegal tying is when you have enough bargaining power to force vendors to take product B even though they want product A. Carriers wanted exclusivity and control.

You mean like a cable company not letting me watch Channel A unless I buy it in a bundle with Channel B and C?

 

[12vElectronics]

This is fairly typical in almost all product based industries. There is always that 'halo' brand/item that every retailer wants to sell and every customer wants to buy. The manufacturer uses that leverage to sell their 'lesser' products.

 

[BootsWalking]

Geez, can we stop with the always speculative doom and gloom nonsense?

This is normal business, just like pricing changes, promotions, etc. Welcome to Wallstreet where you consistently have to sell more stuff in the same period of time.

Actually this is called tying and is illegal if a company is doing it to exercise monopolistic control of a market (and no, they don't have to be a de facto monopoly to be interpreted as exercising monopolistic control).

 

[BuffaloTF]

It's not illegal because it's been on going for decades. Except before it was the carriers that set the terms on the phone manufacturers. Remember this was when Verizon laughed in Steve Jobs face and told him to get lost. No iPod would ever get on their network. Fast forward 4 years later and they were begging Apple to make a compatible iPhone. AT&T agreed to the terms because they were dying.

Sorry but... on what planet was Cingular dying? They were the largest carrier at the time.

 

[danny842003]

That should get Timmy's spreadsheets looking healthier!

**** a business’s trying to make money, wow who would have thought.
I honestly believed Timmy was just in it for charity until you posted this. Thanks.

 

[Juicy Box]

Love it! Apple dictating terms to the monopolistic cable companies. What goes around comes around!

Comcast and Charter are tiny carriers who don’t have their own infrastructure hence their agreement with Verizon. They’re in no way “monopolies”.
The agreement is purely around the cellular service, not around the Internet or TV part… which I agree make Comcast and Charter monopolies but Apple is not dictating anything to them in that regard.

I think @JetTester probably meant them being monopolistic companies in general, not necessarily Comcast’s relatively tiny mobile market.

Also, I think the term oligopoly is a more accurate description.

 

[robjulo]

Apple apparently just begging for an anti-trust action.