Verizon Preparation and Demands for iPhone?

[URFloorMatt]

People seem to forget how ruthless Steve Jobs is until he gets his way. Good or bad, right or wrong, he gets his way. This has nothing to do with be a fan or not, this his how he has always been and I don't see that changing...

Verizon has a little bit of leverage. If the iPhone isn't on Verizon, then Android will continue to grow unchallenged on the largest carrier in the U.S. And, as analysts have pointed out, lack of carriage on Verizon--not antennagate, not coverage/service issues--is the single biggest hindrance to sales growth of the iPhone.

I bet Verizon gets both the V Cast App and the Verizon logo discretely on the back of the phone at the bottom. Hell, it's probably even to Apple's advantage to put a Verizon logo on one and an AT&T logo on the other since the phones run different technology.

It's not like any heavy iTunes user is going to pick up the V Cast App. But the V Cast App might entice over Droid or other legacy Verizon users who currently use it, only to find that they're willing to abandon it for iTunes after a few months.

Neither of these requests is unreasonable or detrimental to Apple. I'm not saying they will happen, since Apple probably has superior bargaining leverage, but they could happen if Verizon plays its cards right.

 

[davidgrimm]

I don't think that Apple would let verizon have much control, at most they will let verizon have their own V CAST app that would be an optional install for users.

I hope this is true. If I gotta have a V CAST account to buy music, etc then this is a deal breaker for me and its back to ATT. Basically, I want as little from my carrier as possible. These bozos have a difficult time getting the network to actually work, why would I want to be forced into buying their music service.

 

[PlayUltimate]

And if/when the phone comes out on VZW's network, AT&T customers experiences will improve greatly and VZW's customers will start seeing major problems like some current iPhone users in big cities do know. That is, of course, assuming a large defection of folks from AT&T to VZW.

I have absolutely no complaints here in Houston so I will not be switching.

You may not see large defections from ATT to VZW. But you will most definitely see folks changing phones on VZWs network. I chose not to get an iPhone with ATT and maintained my contract with VZ and bought an iPod Touch. (Like 3 other family members.) If VZ gets an iPhone, we may very quickly get one.

 

[mstrze]

You may not see large defections from ATT to VZW. But you will most definitely see folks changing phones on VZWs network. I chose not to get an iPhone with ATT and maintained my contract with VZ and bought an iPod Touch. (Like 3 other family members.) If VZ gets an iPhone, we may very quickly get one.

Well from reading forums like this, you'd think that EVERYBODY wants to switch.

 

[twilson]

Apple has made about $10 Bn in revenue from selling Music on iTunes in 7 years. They make more than that per quarter from selling the iPhone on ATT.

Not being funny, but where the hell did you get your iPhone revenue numbers from, they only did $15.5 Bn in revenue for EVERYTHING last quarter.

FYI, for Q3 2010, Apple's iPhone sales accounted for $5.5 Bn in revenue.

 

[kdarling]

I can think of a recent one, all the current Droid phones and GPS. Verizon disables aGPS for all GPS apps except their own.

Verizon hasn't locked GPS on their smartphones for at least a couple of years now.

(From 2000 onward they used their own A-GPS system even on smartphones. It required using their own special network-based servers, which is why developers had to get special permission. Finally the combination of standalone GPS chips and pressure from Google/Apple made them open up smartphones, although all their dumbphones continue to use the same A-GPS servers, as does E911 on all phones.)

not true... on edge the call comes through and the data session ends as well

As others have pointed out, that's incorrect. On EDGE during an active data transfer, voice calls cannot break through as they can on CDMA.

This is a technical fact and well known. Apple even makes mention of this in an old support document:

"Note: If not on 3G, while iPhone is actively transferring data over the cellular data network—downloading a webpage, for example—you may not be able to receive calls. Incoming calls may go to voicemail."

I wish we didn't have to waste so much bandwidth correcting the same old myths over and over again, but it's hard to hold decent discussions based on them.

 

[RaZaK]

umm, ok Verizon

I say Uncle Steve lets them put their own store on the iPhone in exchange for not receiving any portion of the sales of Apps and Music from iTunes.

Good luck with that Verizon because we all love buying Apps and Music from you.

 

[AlpinaB7]

Tiered data packages...

Something I think most have overlooked is the tiered data plans that will most likely roll out before or with the iPhone. I'm not sure how many current at&t customers will walk away from an unlimited data plan. Granted, many users don't use 5g-10g/month & won't see it as a deal breaker today. But that's today...I may very well be wrong, but I see data consumption growing in the mobile arena not slowing down. I for one, don't feel comfortable leaving the shelter of my unlimited plan. Just looking down field...

 

[Omniblast]

Verizon, are you trying to lose out on another contract for the iPhone again? Didn't you learn anything the 1st time around or you want AT&T to renew their contract with Apple?

 

[Mark Booth]

It's sure sounding like Verizon is going to be stuffing their own crap applications into their version of the iPhone. V-Cast anyone?

Thank goodness I live in a town (San Diego) where AT&T provides me with BETTER service than I experienced with Verizon.

I look forward to the iPhone for the "rest of you". It will improve Apple's market share and ease up the burden on AT&T's network in cities where that is a problem. Me... I'm staying right where I'm at.

Mark

 

[bergmef]

Verizon, are you trying to lose out on another contract for the iPhone again? Didn't you learn anything the 1st time around or you want AT&T to renew their contract with Apple?

Why? What did they do?

 

[Matt-M]

You smokin' something good? There's no way you could argue that Apple wouldn't want more market share for the iPhone, it's a money making machine. If they could put it on all the carriers you'd bet your ass they would. It would make them BILLIONS of dollars.

The reason they don't care about market share in the PC arena is simply because the possibility of making tons and tons more money simply doesn't exist. Smartphones sell at a much higher rate and there is a much bigger market for them. It's infinitely easier for them to sell a $200 iPhone than a $2500 computer.

They are making billions of dollars. Checked market cap lately?

They don't care about market share in smartphones either, they care about profit share, and in that area, they are dominating.

Market Share
Apple: 2.8%
Nokia, Samsung & LG Combined: 65.9%
All Others Combined: 31.3%

Profit Share
Apple: 39%
Nokia, Samsung & LG Combined: 32%
All Others Combined: 29%

All the Android phone manufacturers are selling phones, but barely breaking even or even loosing money. Not normally the path to world domination.

Sources
Fortune / CNN
Asymco

 

[pgwalsh]

Verizon

We will control all that you see and hear.

 

[benson304]

They are making billions of dollars. Checked market cap lately?

They don't care about market share in smartphones either, they care about profit share, and it that area, they are dominating.

Market Share
Apple: 2.8%
Nokia, Samsung & LG Combined: 65.9%
All Others Combined: 31.3%

Profit Share
Apple: 39%
Nokia, Samsung & LG Combined: 32%
All Others Combined: 29%

All the Android phone manufacturers are selling phones, but barely breaking even or even loosing money. Not normally the path to world domination.

Sources
Fortune / CNN
Asymco

I think what that really highlights is the fact that Apple demanded that AT&T provide them with a higher margin than other cell phone companies had even thought about asking for.

I'm not sure that all other android phone manufacturers are "barely breaking even or even loosing [sic] money." Take HTC for example.

"HTC's unaudited net profit was T$11.1 billion ($360 million) for July-September, the company said in a statement that gave no further details. That was up from T$5.695 billion in the same period a year ago and well above a consensus forecast of T$8.7 billion by Thomson Reuters I/B/E/S."

Even at an exchange rate of T$30.78 to $1 US, that's a net profit of $360 million. Not exactly something to sneeze at for one quarter.

 

[lazyrighteye]

There is absolutely no way Apple caved on their App Store ecosystem that they've spent years and countless millions (billions?) developing just because Verizon all of the sudden realized they too wanted an "app store."

No. Way.

 

[netdog]

Good luck with that music store Verizon.

Honestly, I can't see anyone choosing to shop with Verizon over Apple. They'll remove their little cr@plet from the phone soon enough.

 

[benson304]

They are making billions of dollars. Checked market cap lately?

They don't care about market share in smartphones either, they care about profit share, and in that area, they are dominating.

Market Share
Apple: 2.8%
Nokia, Samsung & LG Combined: 65.9%
All Others Combined: 31.3%

Profit Share
Apple: 39%
Nokia, Samsung & LG Combined: 32%
All Others Combined: 29%

All the Android phone manufacturers are selling phones, but barely breaking even or even loosing money. Not normally the path to world domination.

Sources
Fortune / CNN
Asymco

Also, I realize they make billions, but my argument is that they could make billions more.

Market Cap is also not a measure of revenue or profit. It is a simple formula of stock price x shares outstanding. All that really means is that the share price of Apple is high. Of course, share price is driven by things like revenue and profit, but it is not an apples to apples comparison. A lot of people would also argue Apple's stock is widely over-valued.

 

[Moof1904]

While you are correct, here in the US we have this thing called Wall Street (you might of heard of them, they have been in the news of late) Here, they run our companies and frankly they do not care what you want.
So these things you suggest, while they make much sense, the answer is no. They have asked us to give you this message: Go sign up and make us more money. If not we'll crash your networks , just like we crashed your, well everything else.

The sad reality is that the consumers ultimately have the control here. If we'd stop being ******* and say to Apple, Verizon, ATT, and whomever "we're not buying another phone or renewing another contract until the industry completely uncouples the phones from the service providers and let's us choose exactly what combination we want," we'd have the features and the freedom that we desire.

Unfortunately, we just keep spending our money making the phone manufacturers and the service providers richer and richer.

Free market and competition would ultimately bring us better quality and value, if we ever wake up and make it happen.

 

[kdarling]

Re: app stores.

It's not likely that Apple would agree to a Verizon app store in lieu of, or in addition to, their own. Instead, Apple might agree to sharing of the profits (it's been rumored that some carriers have negotiated this before).

Making programs like VZNavigator (same as ATT has for their iPhone), remote FiOS akin to ATT U-Verse, and perhaps even a VCast Video player, all available from the App Store would make sense, since these have mostly been done before.

If I were Verizon, I'd simply try to negotiate adding a special section in the App Store. (Similar to what they did with the Android Market.) Worth a shot.

 

[theOtherGeoff]

I've used simultaneous voice and data maybe once or twice. Most overhyped feature ever.

yes, for you. But the problem with most people (especially iPhone haters. eg. android users), is that they try to project _their_ needs on the market. Lots of people use data and voice simultaneously over 3G. For me it's critical.

 

[theOtherGeoff]

Why? What did they do?

Apple shopped the prototype iPhone1 to all carriers. Verizon had their opportunity to have basically what ATT had. Part of it was lack of delivery (ATT[cingular] promised an aggressive 3G bandwidth timetable... likely not met), but more importantly, Verizon was focused on branding the phone (logo on the front, owning the app/music/ringtone store, owning the voicemail and email, etc etc), and Apple steadfastly refused to budge on controlling the experience (or so goes the rumor).

The exclusivity that Cingular/ATT negotiated in return for giving up the std relationship (carrier sell phones with the features the carriers wanted to sell, as opposed to apple selling it's phone to consumers and the carriers were just 'pipes'), was the deal with the devil Apple had to do to get into the U.S. market.

 

[old-wiz]

What about..

The crapware that Verizon insists on stuffing onto their phones? Verizon simply cannot accept that all people want from them is a connection (sort of dumb pipe but wireless). They want their crappy vCast, they don't want people to be able to put their own music onto phones, and god knows what other crap. A Verizon iPhone would probably be more expensive than AT&T and would offer fewer good reasons to buy.

 

[Eric S.]

Sorry Apple, too late for me. I love my Droid, and I'm not going back.

 

[kdarling]

yes, for you. But the problem with most people (especially iPhone haters. eg. android users), is that they try to project _their_ needs on the market. Lots of people use data and voice simultaneously over 3G. For me it's critical.

Good point about personal needs, but bad point about Android users, since simultaneous voice+data is dependent on the network, not the OS.

Apple shopped the prototype iPhone1 to all carriers.

No they didn't. The iPhone project didn't get organized until early 2006, half a year after Apple first went to Verizon with just an idea. The most they could've shown Verizon in late 2005 were the iPods that they hacked a sample UI onto.

If Verizon had seen a working iPhone, don't you think they'd have jumped on it?

Verizon had their opportunity to have basically what ATT had. Part of it was lack of delivery (ATT[cingular] promised an aggressive 3G bandwidth timetable... likely not met),

The only "aggressive" thing ATT did was to boost their EDGE speed so the first iPhone didn't look ridiculous. Unfortunately, this took critical resources away from ATT's 3G expansion.

but more importantly, Verizon was focused on branding the phone (logo on the front, owning the app/music/ringtone store, owning the voicemail and email, etc etc), and Apple steadfastly refused to budge on controlling the experience (or so goes the rumor).

Does sounds like the typical rumor, since the demands were apparently on Apple's side.

Verizon has publicly stated that the holdup was about sales partners, customer care, revenue sharing, etc.

Since that time, Apple has dropped most of those early demands. The revenue sharing stopped after the first year. And iPhones sell over the place now, not just at Apple stores. I suspect Verizon _still_ wants to allow people to buy phone insurance though.

The exclusivity that Cingular/ATT negotiated in return for giving up the std relationship (carrier sell phones with the features the carriers wanted to sell, as opposed to apple selling it's phone to consumers and the carriers were just 'pipes'), was the deal with the devil Apple had to do to get into the U.S. market.

ATT gave up nothing. As ATT has said, Apple bent over for them. The long exclusive makes this quite clear.

 

[alhedges]

I bet Verizon gets both the V Cast App and the Verizon logo discretely on the back of the phone at the bottom. Hell, it's probably even to Apple's advantage to put a Verizon logo on one and an AT&T logo on the other since the phones run different technology.

No way Verizon gets its logo on the iPhone - Apple is way too focused on design to let its phones get tarted up like nascar. The iPhone currently has no logo at all on the front, and only the apple graphic on the back. Compare that with the Droid X, which says both Motorola and Verizon on the front, and on the back not only has the Motorola logo, but also says Verizon *and* Google on the back. I've heard good things about the phone, but that's just tacky.