Raj Aggarwal Details Jobs' Tenacity in AT&T/Apple Revenue Sharing Deal

[ValSalva]

This was innovation in its own right. Steve annoyed me with some of his views, often excluding capabilities like blu-ray, RAM upgrades in the iPhone/iPad, etc., but I always admired his tenacity. Tim's doing fine, and I think he's starting to get better at certain things, but Steve will always be missed.

This pretty much sums it up. SJ made decisions that often were infuriating and seemed at the time to abandon the loyal Apple core customers but he was almost always right.

Tim Cook doesn't seem to have nearly the ego that SJ had. He won't seek credit for being a touch negotiator or decision maker because he doesn't seek attention. But he has made tough decisions and IMHO is doing an excellent job. Innovation does not follow a schedule and Wall Street is a bunch useless hot air.

 

[crackbookpro]

The AT&T exclusivity is what lead to Android gaining adoption and market presence in 08-10. This is the time period where Apple actually realized for the first time - exclusivity isn't all its cracked up to be.

Android/Google should have thanked SJ, AT&T and capitalism yearrrs back..

 

[donutbagel]

Why would Steve Jobs be conceding anything to give AT&T an exclusive deal? That's to AT&T's advantage, not Apple's. The story here is that Steve Jobs gave AT&T the exclusive to get the deal he wanted.

Apple should not want to give AT&T an exclusive deal because it would limit Apple. What I meant is that giving the exclusive deal was a sacrifice to pay.

 

[kdarling]

As AT&T put it at the iPhone debut when Jobs claimed to have put one over on them:

"I'm not sure we gave anything," ... "I think (Apple) bent a lot."

All AT&T did was to give Apple the monthly subsidy amount that normally would've gone to help the customer pay less upfront for the phone. It was no extra skin off AT&T's back; only the customer's.

In other words, Apple got BOTH the retail price... AND the subsidy.

This only lasted a year, and then Apple and AT&T went back to the usual subsidy arrangement starting with the iPhone 3G.

"The new agreement between Apple and AT&T eliminates the revenue-sharing model under which AT&T shared a portion of monthly service revenue with Apple. Under the revised agreement, which is consistent with traditional equipment manufacturer-carrier arrangements, there is no revenue sharing and both iPhone 3G models will be offered at attractive prices to broaden the market potential and accelerate subscriber volumes."

- AT&T announcement

Part of the reason of course was to get more Americans to buy the iPhone. They were not used to paying over $200 upfront.

Another big reason the "sharing" got dropped, was because more and more people were unlocking iPhones and using them around the world. This meant Apple never got to see the monthly payment, and this became a concern to Apple and its investors.

You could actually see Jobs' view about jailbreakers and unlockers change. At first he seemed proud of all the attention his new device was getting. Then Apple realized how much they were losing in revenue, and suddenly jailbreaking was evil, and Apple has since spent their time trying to convince the US government to keep it banned.

 

[TMay]

We will never see things like this from Cook.

Hence, why Eddie Cue is the one that works these deals.

 

[JohnPhamlore]

A Verizon phone would have needed Qualcomm chips?

The exclusivity agreement is probably one of the biggest reasons that Android got as big of a foothold as it has. I had a lot of friends in those early years who would tell me, "I really want an iPhone but I need Verizon/Tmobile/etc" network. Those people ended up settling for some crappy Crapdroid phone.

Wasn't the time period Apple and Verizon agreed to offer the iPhone around the time Apple switched baseband chipsets from Infineon to Qualcomm? I thought Intel bought Infineon, and eventually Apple transitioned from Infineon to nowadays purely Qualcomm. The Qualcomm chipsets are important on Verizon due to Verizon's needing to push LTE, and I believe only Qualcomm has the IP to facilitate LTE with fallback to CDMA on Verizon's network.

 

[12vElectronics]

The exclusivity agreement is probably one of the biggest reasons that Android got as big of a foothold as it has. I had a lot of friends in those early years who would tell me, "I really want an iPhone but I need Verizon/Tmobile/etc" network. Those people ended up settling for some crappy Crapdroid phone.

The AT&T exclusivity is what lead to Android gaining adoption and market presence in 08-10. This is the time period where Apple actually realized for the first time - exclusivity isn't all its cracked up to be.

Android/Google should have thanked SJ, AT&T and capitalism yearrrs back..

I agree. I remember those days. I didn't have the first iPhone, but I did get the iPhone 3G. Most of my friends weren't able to get an iPhone because for whatever reason they had to be on a different carrier. They ended up getting Androids and till this day many have stuck with Android.

 

[Ramchi]

Steve had the advantage

Steve Jobs was not afraid of failures and he never pretended to be perfect CEO of the Century....he was mean, studious and visionary. Being hands-on is one thing but as a CEO stature, are you ready to be dumped by your partners and suppliers ....Steve was ready and probably would have set Tim Cook to fix any relationship issues without feeling guilt. He was like a team captain than CEO.

 

[trido]

For me also, my son and i watched the 6 pm the local news on the iphone lines at ATT, we told the wife we are off to try to get one.
We arrived at 6:20 pm the store had hired an off duty state trooper for security in fact we had to wait outside as there we too many customers in store.
We did get one. Real cool day.

I still remember waiting in line for the very first one at ATT/Cingular. Coolest thing ever when I finally got my hands on it.