It really is too bad that Apple chose Cingular. That GSM network is really going to cripple the internet features. (Which is most of the phone) That EDGE network sucks so bad. I thought the keynote was funny. The mighty Steve Jobs actually had to stall for time as it loaded a web page. Had he a CDMA version in his hand it would have been lighting fast. Like stated above, I am not starting a CDMA vs. GSM knife fight. I am simply noting network speeds.
The keynote was done over WiFi, not EDGE. It was slow because he loaded up the NYTimes web site. Even on my MacBook Pro with a Cable modem, that site is freakin' slow. And slow as it was, it was a world faster than that same full site loading on my Treo. Consider that the Safari version he used at the time was probably not optimized yet, and throw in the fact that any cell phone is using a slower processor than a laptop, and you're going to get less-than lightning results. But to anyone who ever tried to do the same thing (load an entire real news web site, not just a mobile optimized one) on any other handheld device, it was pretty impressive.
All of the GSM vs CDMA battles boil down to whoever is making the argument's current provider. People just don't want to switch carriers and pay a penalty, or they get crappy coverage from ATT where they live, so they moan about the Cingular/ATT decision. The bottom line is that a lot of Apple freaks will make the switch, no matter how much they complain about it. And millions of others are already with ATT. That, combined with the European release, should be enough people to put the iPhone on the map. Remember, the iPod was originally only available on a Firewire-equipped Mac, (a much smaller market than the iPhone's) and it sold well enough to warrant further development.
Apple went for the best deal it could get. Jobs needed to sign an exclusivity deal, because that was the only way he would get control over all hardware and marketing decisions. (Ask Palm how easy it is to keep service providers from tinkering with your designs.) He went to Verizon first, since Verizon has the biggest market share in the US, but they couldn't agree on terms. So he went to the next biggest market share, ATT. Simple as that. ATT gave him what he wanted, plus the added bonus of having to do no redesign for the European version. Done deal.
HSDPA improves upon that performance with the potential to hit up to 14.4Mbps (in reality, you'll average more in the 400Kbps to 700Kbps range).
I think that's why Apple chose AT&T over VZW, greater long-term future of the GSM based wireless technology over the CDMA based technology. As well as the ability to develop a device that will be suited for about 80% of the worldwide wireless market.
Apple's move is not so surprising really, in a way Nokia is taking a similar approach, its top-of-the-line models are always made for GSM. Only low-cost models are made for CDMA.
He went to Verizon first, since Verizon has the biggest market share in the US, but they couldn't agree on terms. So he went to the next biggest market share, ATT. Simple as that.
Not exactly. Verizon actually is #2 in marketshare in the US market, though it is very close between them and ATT (who is #1). Jobs likely went to Verizon first because they have better 3G coverage than ATT does, and seem to keep their customers happier than ATT overall, judging from relative customer churn rates (Verizon's is around 1.1%, ATT's is 1.7%, aka a lot higher).
Other than that, I agree with most of what you said.
If the USA Today report is true (and I still have my doubts), Apple was foolish to give ATT/Cingular that long of an exclusive. To be limited in the US for five years to a single carrier that has less than 30% of the market is silly. It's a bit like selling Macs only to folks whose last names end in S through Z.
Sure, a few people may port on over to ATT/Cing just to get the iPhone... the latest & greatest, 'early adopt at all costs' crowd certainly will. But so very many won't, for many reasons, such as ATT/Cing not having good and/or reliable coverage in their area, or ATT/Cingular's legendarily bad customer service. Or perhaps they're just satisfied with their current network, and do not want to switch. Apple will find, belatedly, that it lost a lot of potential customers by going with such a long exclusionary period in the US.
The bright spot, of course, is that the iPhone's success is not wholly dependent on the US market. In fact, European and Asian sales both may exceed US sales. Still, five years, if true... dumb move. Two years would've made loads more sense.
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It wasn't silly if Verison wouldn't agree to Apple's terms, and ATT insisted on the five years as payment for agreeing to the terms that ATT wouldn't agree to.
If both ATT and Verison turned the phone down, what then? Apple should have come to terms with a company that has 10% of the market? What would you be saying then? ATT has over 61 million customers now.
So which 2G network does Japan have? I doubt that they didn't use cell phones until 3G came out.
They did. In fact, it was difficult to get them to subscribe to 3G services at first, because of the cost. That's also why texting was very popular over there first. It was cheaper. It's only recently that 3G has become more popular in Japan.
The keynote was done over WiFi, not EDGE. It was slow because he loaded up the NYTimes web site. Even on my MacBook Pro with a Cable modem, that site is freakin' slow. And slow as it was, it was a world faster than that same full site loading on my Treo. Consider that the Safari version he used at the time was probably not optimized yet, and throw in the fact that any cell phone is using a slower processor than a laptop, and you're going to get less-than lightning results. But to anyone who ever tried to do the same thing (load an entire real news web site, not just a mobile optimized one) on any other handheld device, it was pretty impressive.
All of the GSM vs CDMA battles boil down to whoever is making the argument's current provider. People just don't want to switch carriers and pay a penalty, or they get crappy coverage from ATT where they live, so they moan about the Cingular/ATT decision. The bottom line is that a lot of Apple freaks will make the switch, no matter how much they complain about it. And millions of others are already with ATT. That, combined with the European release, should be enough people to put the iPhone on the map. Remember, the iPod was originally only available on a Firewire-equipped Mac, (a much smaller market than the iPhone's) and it sold well enough to warrant further development.
Apple went for the best deal it could get. Jobs needed to sign an exclusivity deal, because that was the only way he would get control over all hardware and marketing decisions. (Ask Palm how easy it is to keep service providers from tinkering with your designs.) He went to Verizon first, since Verizon has the biggest market share in the US, but they couldn't agree on terms. So he went to the next biggest market share, ATT. Simple as that. ATT gave him what he wanted, plus the added bonus of having to do no redesign for the European version. Done deal.
All of the GSM vs CDMA battles boil down to whoever is making the argument's current provider.
In most cases, yes, but the iPhone really ought to run 3G. In America, that means CDMA2000/EVDO. The non-qualcomm 3G air-interfaces unfortunately utilize spectrum in a way that is not convenient to the FCC. W-CDMA falls into this category.
This isn't a Qualcomm protection thing. Qualcomm has engineered their standards around the FCC. Honestly, there's a good chance that ATT will become a Qualcomm licensee within the next 5 years unless the FCC changes their existing rules.
It wasn't silly if Verizon wouldn't agree to Apple's terms, and ATT insisted on the five years as payment for agreeing to the terms that ATT wouldn't agree to.
If both ATT and Verison turned the phone down, what then? Apple should have come to terms with a company that has 10% of the market? What would you be saying then? ATT has over 61 million customers now.
It was silly, though, if its truly five years, no loopholes.
First off, ATT and Verizon weren't the only options. Sprint-Nextel has nearly as many customers as either of them, and a strong emphasis on high-tech phones (and the kind of customers who like such phones). They also have a pretty nice 3G network.
But, it probably wouldn't have even gotten that far. ATT/Cingular, frankly, NEEDED Apple. Verizon has been routinely beating them in customer adds ever since the Cingular-ATT Wireless merger two years ago, and Verizon is poised to take the #1 spot awayfromthem, something that, if it happens, likely will be seen as a huge failure on ATT's part by many (especially considering that after the merger, they were 5 1/2 million customers AHEAD of Verizon). Stan Sigman's job could be on the line.
So, if it really is a bulletproof five-year US exclusive, Apple drove a fairly weak bargain. ATT needed Apple pretty desperately, and would be loathe to not only lose the iPhone, but also have a large competitor (such as Verizon or Sprint-Nextel) get the iPhone as a weapon to beat them about the head and shoulders with.
However, given that Steve Jobs is infamous for NOT driving weak bargains, I still have the sneaking suspicion that there is some kind of loophole in that 'five-year exclusive'. However, no one from ATT or Apple would want such a loophole to be known about, so I guess we're just gonna have to wait and see, eh?
It was silly, though, if its truly five years, no loopholes.
First off, ATT and Verizon weren't the only options. Sprint-Nextel has nearly as many customers as either of them, and a strong emphasis on high-tech phones (and the kind of customers who like such phones). They also have a pretty nice 3G network.
But, it probably wouldn't have even gotten that far. ATT/Cingular, frankly, NEEDED Apple. Verizon has been routinely beating them in customer adds ever since the Cingular-ATT Wireless merger two years ago, and Verizon is poised to take the #1 spot awayfromthem, something that, if it happens, likely will be seen as a huge failure on ATT's part by many (especially considering that after the merger, they were 5 1/2 million customers AHEAD of Verizon).
So, if it really is a five-year US exclusive, Apple drove a fairly weak bargain. ATT needed Apple pretty desperately, and would be loathe to not only lose the iPhone, but also have a large competitor (such as Verizon or Sprint-Nextel) get the iPhone as a weapon to beat them about the head and shoulders with.
However, given that Steve Jobs is infamous for NOT driving weak bargains, I still have the sneaking suspicion that there is some kind of loophole in that 'five-year exclusive'. However, no one from ATT or Apple would want such a loophole to be known about, so I guess we're just gonna have to wait and see, eh?
Telecom intrigue, it is fun.
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It wouldn't be much of a contract if there were loopholes.
No, this is the best they could do. If they could have done better, they would have. You can't say that Apple drove a weak bargin, because you (and I) only know some minimal data about it.
I'm on Sprint, and they have their problems as well, though hi speed internet is ubiquitous with them, and is cheap compared to other companies. But, they are about 25 - 30% smaller, and are losing customers rather than gaining them. Nextel was one of THE worst cell companies out there - ever.
It wouldn't be much of a contract if there were loopholes.
Unless there are loopholes, but ATT and Apple don't tell anyone about the loopholes until the time's right. Because if said loopholes are known in advance, folks will be less likely to migrate to ATT to get the iPhone, and will instead 'wait it out'.
But if Apple and ATT instead agree to keep their mouths shut about it, its a win-win for both companies. ATT gets the full effect of the iPhone by acting like it has an uber-long exclusionary period, and Apple gets to sell to a much larger segment of the US market before the five years is up. Speculation, but money-wise, it makes sense for both companies.
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No, this is the best they could do. If they could have done better, they would have. You can't say that Apple drove a weak bargin, because you (and I) only know some minimal data about it.
Regardless of the details, I don't think a true 5-year exclusionary period is anywhere near the best Apple could do, simply because it makes no sense to be locked into selling to less than 30% of the US market for the very long five-year time period. I do not think Apple is foolish enough to leave billions on the table, therefore I think there's a good likelihood of a loophole somewhere.
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I'm on Sprint, and they have their problems as well, though hi speed internet is ubiquitous with them, and is cheap compared to other companies. But, they are about 25 - 30% smaller, and are losing customers rather than gaining them. Nextel was one of THE worst cell companies out there - ever.
Sprint is actually only about 10-15% smaller than ATT-- roughly 54 million wireless customers vs ATT's 62 million. And yes, they are having their merger issues, just as ATT/Cingular did back after their merger of Cingular and ATT Wireless in '04. But like the Cingular-ATTW merger, they should come out of it, even though I do like to make fun of them in the meantime.
Unless there are loopholes, but ATT and Apple don't tell anyone about the loopholes until the time's right. Because if said loopholes are known in advance, folks will be less likely to migrate to ATT to get the iPhone, and will instead 'wait it out'.
But if Apple and ATT instead agree to keep their mouths shut about it, its a win-win for both companies. ATT gets the full effect of the iPhone by acting like it has an uber-long exclusionary period, and Apple gets to sell to a much larger segment of the US market before the five years is up. Speculation, but money-wise, it makes sense for both companies.
Regardless of the details, I don't think a true 5-year exclusionary period is anywhere near the best Apple could do, simply because it makes no sense to be locked into selling to less than 30% of the US market for the very long five-year time period. I do not think Apple is foolish enough to leave billions on the table, therefore I think there's a good likelihood of a loophole somewhere.
Sprint is actually only about 10-15% smaller than ATT-- roughly 54 million wireless customers vs ATT's 62 million. And yes, they are having their merger issues, just as ATT/Cingular did back after their merger of Cingular and ATT Wireless in '04. But like the Cingular-ATTW merger, they should come out of it, even though I do like to make fun of them in the meantime.
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You're just guessing, you don't know any of this. I see no reason why either company should have agreed to a contract that allows either one to weasel out of parts of it.
That doesn't mean that if conditions change, parts couldn't be re-negotiated. That does happen.
You're just guessing, you don't know any of this. I see no reason why either company should have agreed to a contract that allows either one to weasel out of parts of it.
Well, that's the fun part. We don't know that there are any loopholes, and we don't know that there AREN'T any loopholes- perhaps for, say, a new Apple handset model that is a bit different from the iPhone, and which wouldn't be ATT-exclusive. ATT and Apple have not released their contract to be publicly scrutinized in detail, and I doubt they ever will. So all we can do is engage in some educated speculation.
Let's just say I will not be shocked if, two years or so from now, we 'suddenly' find out that the Apple-ATT contract is not as bulletproof as previously thought.
As to the reasons why the contract might've been written in such a way, I've already talked about that.
There will be a 3G iPhone soon enough. Apple likes to be in the front line you know, and many regions 3G phones I guess are beginning to outsell 2G phones. So it's just a matter of time. AT&T will probably have a decent 3G network ready soon, and will then gladly carry a 3G iPhone. If not it would be a bad move by AT&T. They probably already have a time frame for this Apple and AT&T I guess.
I think the tough thing is to talk 3G providers into reasonable network traffic fees. I know in Sweden there are already "3G surf as much as you can, for a set monthly price" popping up. This should benefit a 3G iphone that is designed to use a lot of traffic frequently.
WiMax will be here inside of 5 years. You'll be able to use VoIP to make calls on your iPhone when that happens. Unless Apple completely blocks all VoIP software from their machine, which might be grounds for fanboy revolt.
I dont think the true nature of the ATT/Apple deal has seen full light quite yet.
WiMax will be here inside of 5 years. You'll be able to use VoIP to make calls on your iPhone when that happens. Unless Apple completely blocks all VoIP software from their machine, which might be grounds for fanboy revolt.
I dont think the true nature of the ATT/Apple deal has seen full light quite yet.
Well, not your current phone, since it doesn't have WiMAx and doesn't have the ability to be updated.
It was silly, though, if its truly five years, no loopholes.
So, if it really is a bulletproof five-year US exclusive, Apple drove a fairly weak bargain. ATT needed Apple pretty desperately, and would be loathe to not only lose the iPhone, but also have a large competitor (such as Verizon or Sprint-Nextel) get the iPhone as a weapon to beat them about the head and shoulders with.
However, given that Steve Jobs is infamous for NOT driving weak bargains, I still have the sneaking suspicion that there is some kind of loophole in that 'five-year exclusive'. However, no one from ATT or Apple would want such a loophole to be known about, so I guess we're just gonna have to wait and see, eh?
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I don't think Cingular (who they bargained with, not the new AT&T) felt it needed Apple's iPhone to survive (come on, its a PHONE, not the greatest device ever produced by man!).
But beyond that, you're not looking at the whole deal. All you're looking at is "5 years exclusive" and calling it a bad deal. Look what apple got in return. They get a cut of the action (phone makers don't get that, normally). They get to control the phone, the UI, customer service, advertising, etc. Again, not something the cell companies normally give up. This is what Verizon balked at (most likely the sharing of the fees and the non-crippling of the phone). In my opinion, AT&T gave up a lot, and, in return, got a lot. That's part of a deal.
And how would you like to be AT&T and, after two years of working to promote and push the iPhone to the point where its about to explode (sorry, but I don't see an early explosion, not at $600 a pop), and then Apple says "Thanks for all the hard work, we're going to now sell it through Verizon and Sprint as well." It'd be like Intel giving Apple all that help to get OS X running well and optimized for x86, and then Apple going "Thanks. We're now going to use AMD chips!". If you do crap like that to your supposed partners, how many people are going to want to partner with you the next time?
But what I want to know what they'll do when there's a problem with the iPhone. Do we have to send it in and get it fixed? Will they replace it (doubt it). With my verizon phone, if something goes wrong with it within the first year (without regard as to cause or problem), I can take it in and get it replaced, no questions asked.
IIRC, one of the things apple wanted was control and say over the hardware (which will be great, because then Apple can say its AT&T's problem, and AT&T can say its Apple's problem, and it'll never get addressed!). Will Apple be replacing the hardware (along with syncing over all your data to the new one)? Will they want to repair it? What if you take it into the local AT&T store (since you don't have a convenient Apple store nearby, since you don't live in one of the 6 cities Apple decided to stick 500 stores in). Will they replace it, or have to send it in?
How many of you are willing to be without your phone/handheld computer for 3-5 business days? This isn't an iPod, here. People use their phone for critical daily functions. You can't just take it away for a week and say "But, you have an iPhone (when it works), stop complaining!" (Oh, wait, I forgot. Apple does that all the time with people's computers.)
I also want to know how solid this thing is going to be. My phone ends up hitting concrete A LOT. Is the iPhone's screen just going to crack the first time it hits the carpet? Will the screen actually be scratch resistant (as opposed, say, to ipod screens)? Keep in mind that, with everything on the screen, you can't get a case to cover the screen or the like, because then you can't use it!
These are the questions that need to be answered. Not "OMG, is it CDMA????" or "Will it have pay-as-you-go!".
I have Verizon and the signal strength is fantastic everywhere in Southern California as opposed to Cingular which is really not so good here. A lot of my friends have Cingular and their calls to me sound bad and drop frequently. So I'll get an iPhone to play around with but I won't switch exclusively to Cingular.
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Um, how will it work in Asia if there is no CDMA version? So, there will be a CDMA version.
I think the headline here is ATT gets 5 year exclusive deal in the US, which was already suspected.
Yup! I'm sure that's correct.
It really is too bad that Apple chose Cingular. That GSM network is really going to cripple the internet features. (Which is most of the phone) That EDGE network sucks so bad. I thought the keynote was funny. The mighty Steve Jobs actually had to stall for time as it loaded a web page. Had he a CDMA version in his hand it would have been lighting fast. Like stated above, I am not starting a CDMA vs. GSM knife fight. I am simply noting network speeds.
The keynote was done over WiFi, not EDGE. It was slow because he loaded up the NYTimes web site. Even on my MacBook Pro with a Cable modem, that site is freakin' slow. And slow as it was, it was a world faster than that same full site loading on my Treo. Consider that the Safari version he used at the time was probably not optimized yet, and throw in the fact that any cell phone is using a slower processor than a laptop, and you're going to get less-than lightning results. But to anyone who ever tried to do the same thing (load an entire real news web site, not just a mobile optimized one) on any other handheld device, it was pretty impressive.
All of the GSM vs CDMA battles boil down to whoever is making the argument's current provider. People just don't want to switch carriers and pay a penalty, or they get crappy coverage from ATT where they live, so they moan about the Cingular/ATT decision. The bottom line is that a lot of Apple freaks will make the switch, no matter how much they complain about it. And millions of others are already with ATT. That, combined with the European release, should be enough people to put the iPhone on the map. Remember, the iPod was originally only available on a Firewire-equipped Mac, (a much smaller market than the iPhone's) and it sold well enough to warrant further development.
Apple went for the best deal it could get. Jobs needed to sign an exclusivity deal, because that was the only way he would get control over all hardware and marketing decisions. (Ask Palm how easy it is to keep service providers from tinkering with your designs.) He went to Verizon first, since Verizon has the biggest market share in the US, but they couldn't agree on terms. So he went to the next biggest market share, ATT. Simple as that. ATT gave him what he wanted, plus the added bonus of having to do no redesign for the European version. Done deal.
HSDPA improves upon that performance with the potential to hit up to 14.4Mbps (in reality, you'll average more in the 400Kbps to 700Kbps range).
I think that's why Apple chose AT&T over VZW, greater long-term future of the GSM based wireless technology over the CDMA based technology. As well as the ability to develop a device that will be suited for about 80% of the worldwide wireless market.
Apple's move is not so surprising really, in a way Nokia is taking a similar approach, its top-of-the-line models are always made for GSM. Only low-cost models are made for CDMA.
He went to Verizon first, since Verizon has the biggest market share in the US, but they couldn't agree on terms. So he went to the next biggest market share, ATT. Simple as that.
Not exactly. Verizon actually is #2 in marketshare in the US market, though it is very close between them and ATT (who is #1). Jobs likely went to Verizon first because they have better 3G coverage than ATT does, and seem to keep their customers happier than ATT overall, judging from relative customer churn rates (Verizon's is around 1.1%, ATT's is 1.7%, aka a lot higher).
Other than that, I agree with most of what you said.
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If the USA Today report is true (and I still have my doubts), Apple was foolish to give ATT/Cingular that long of an exclusive. To be limited in the US for five years to a single carrier that has less than 30% of the market is silly. It's a bit like selling Macs only to folks whose last names end in S through Z.
Sure, a few people may port on over to ATT/Cing just to get the iPhone... the latest & greatest, 'early adopt at all costs' crowd certainly will. But so very many won't, for many reasons, such as ATT/Cing not having good and/or reliable coverage in their area, or ATT/Cingular's legendarily bad customer service. Or perhaps they're just satisfied with their current network, and do not want to switch. Apple will find, belatedly, that it lost a lot of potential customers by going with such a long exclusionary period in the US.
The bright spot, of course, is that the iPhone's success is not wholly dependent on the US market. In fact, European and Asian sales both may exceed US sales. Still, five years, if true... dumb move. Two years would've made loads more sense.
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It wasn't silly if Verison wouldn't agree to Apple's terms, and ATT insisted on the five years as payment for agreeing to the terms that ATT wouldn't agree to.
If both ATT and Verison turned the phone down, what then? Apple should have come to terms with a company that has 10% of the market? What would you be saying then? ATT has over 61 million customers now.
So which 2G network does Japan have? I doubt that they didn't use cell phones until 3G came out.
They did. In fact, it was difficult to get them to subscribe to 3G services at first, because of the cost. That's also why texting was very popular over there first. It was cheaper. It's only recently that 3G has become more popular in Japan.
The keynote was done over WiFi, not EDGE. It was slow because he loaded up the NYTimes web site. Even on my MacBook Pro with a Cable modem, that site is freakin' slow. And slow as it was, it was a world faster than that same full site loading on my Treo. Consider that the Safari version he used at the time was probably not optimized yet, and throw in the fact that any cell phone is using a slower processor than a laptop, and you're going to get less-than lightning results. But to anyone who ever tried to do the same thing (load an entire real news web site, not just a mobile optimized one) on any other handheld device, it was pretty impressive.
All of the GSM vs CDMA battles boil down to whoever is making the argument's current provider. People just don't want to switch carriers and pay a penalty, or they get crappy coverage from ATT where they live, so they moan about the Cingular/ATT decision. The bottom line is that a lot of Apple freaks will make the switch, no matter how much they complain about it. And millions of others are already with ATT. That, combined with the European release, should be enough people to put the iPhone on the map. Remember, the iPod was originally only available on a Firewire-equipped Mac, (a much smaller market than the iPhone's) and it sold well enough to warrant further development.
Apple went for the best deal it could get. Jobs needed to sign an exclusivity deal, because that was the only way he would get control over all hardware and marketing decisions. (Ask Palm how easy it is to keep service providers from tinkering with your designs.) He went to Verizon first, since Verizon has the biggest market share in the US, but they couldn't agree on terms. So he went to the next biggest market share, ATT. Simple as that. ATT gave him what he wanted, plus the added bonus of having to do no redesign for the European version. Done deal.
Good analysis.
All of the GSM vs CDMA battles boil down to whoever is making the argument's current provider.
In most cases, yes, but the iPhone really ought to run 3G. In America, that means CDMA2000/EVDO. The non-qualcomm 3G air-interfaces unfortunately utilize spectrum in a way that is not convenient to the FCC. W-CDMA falls into this category.
This isn't a Qualcomm protection thing. Qualcomm has engineered their standards around the FCC. Honestly, there's a good chance that ATT will become a Qualcomm licensee within the next 5 years unless the FCC changes their existing rules.
It wasn't silly if Verizon wouldn't agree to Apple's terms, and ATT insisted on the five years as payment for agreeing to the terms that ATT wouldn't agree to.
If both ATT and Verison turned the phone down, what then? Apple should have come to terms with a company that has 10% of the market? What would you be saying then? ATT has over 61 million customers now.
It was silly, though, if its truly five years, no loopholes.
First off, ATT and Verizon weren't the only options. Sprint-Nextel has nearly as many customers as either of them, and a strong emphasis on high-tech phones (and the kind of customers who like such phones). They also have a pretty nice 3G network.
But, it probably wouldn't have even gotten that far. ATT/Cingular, frankly, NEEDED Apple. Verizon has been routinely beating them in customer adds ever since the Cingular-ATT Wireless merger two years ago, and Verizon is poised to take the #1 spot away from them, something that, if it happens, likely will be seen as a huge failure on ATT's part by many (especially considering that after the merger, they were 5 1/2 million customers AHEAD of Verizon). Stan Sigman's job could be on the line.
So, if it really is a bulletproof five-year US exclusive, Apple drove a fairly weak bargain. ATT needed Apple pretty desperately, and would be loathe to not only lose the iPhone, but also have a large competitor (such as Verizon or Sprint-Nextel) get the iPhone as a weapon to beat them about the head and shoulders with.
However, given that Steve Jobs is infamous for NOT driving weak bargains, I still have the sneaking suspicion that there is some kind of loophole in that 'five-year exclusive'. However, no one from ATT or Apple would want such a loophole to be known about, so I guess we're just gonna have to wait and see, eh?
Telecom intrigue, it is fun.
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It was silly, though, if its truly five years, no loopholes.
First off, ATT and Verizon weren't the only options. Sprint-Nextel has nearly as many customers as either of them, and a strong emphasis on high-tech phones (and the kind of customers who like such phones). They also have a pretty nice 3G network.
But, it probably wouldn't have even gotten that far. ATT/Cingular, frankly, NEEDED Apple. Verizon has been routinely beating them in customer adds ever since the Cingular-ATT Wireless merger two years ago, and Verizon is poised to take the #1 spot away from them, something that, if it happens, likely will be seen as a huge failure on ATT's part by many (especially considering that after the merger, they were 5 1/2 million customers AHEAD of Verizon).
So, if it really is a five-year US exclusive, Apple drove a fairly weak bargain. ATT needed Apple pretty desperately, and would be loathe to not only lose the iPhone, but also have a large competitor (such as Verizon or Sprint-Nextel) get the iPhone as a weapon to beat them about the head and shoulders with.
However, given that Steve Jobs is infamous for NOT driving weak bargains, I still have the sneaking suspicion that there is some kind of loophole in that 'five-year exclusive'. However, no one from ATT or Apple would want such a loophole to be known about, so I guess we're just gonna have to wait and see, eh?
Telecom intrigue, it is fun.
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It wouldn't be much of a contract if there were loopholes.
No, this is the best they could do. If they could have done better, they would have. You can't say that Apple drove a weak bargin, because you (and I) only know some minimal data about it.
I'm on Sprint, and they have their problems as well, though hi speed internet is ubiquitous with them, and is cheap compared to other companies. But, they are about 25 - 30% smaller, and are losing customers rather than gaining them. Nextel was one of THE worst cell companies out there - ever.
It wouldn't be much of a contract if there were loopholes.
Unless there are loopholes, but ATT and Apple don't tell anyone about the loopholes until the time's right. Because if said loopholes are known in advance, folks will be less likely to migrate to ATT to get the iPhone, and will instead 'wait it out'.
But if Apple and ATT instead agree to keep their mouths shut about it, its a win-win for both companies. ATT gets the full effect of the iPhone by acting like it has an uber-long exclusionary period, and Apple gets to sell to a much larger segment of the US market before the five years is up. Speculation, but money-wise, it makes sense for both companies.
No, this is the best they could do. If they could have done better, they would have. You can't say that Apple drove a weak bargin, because you (and I) only know some minimal data about it.
Regardless of the details, I don't think a true 5-year exclusionary period is anywhere near the best Apple could do, simply because it makes no sense to be locked into selling to less than 30% of the US market for the very long five-year time period. I do not think Apple is foolish enough to leave billions on the table, therefore I think there's a good likelihood of a loophole somewhere.
I'm on Sprint, and they have their problems as well, though hi speed internet is ubiquitous with them, and is cheap compared to other companies. But, they are about 25 - 30% smaller, and are losing customers rather than gaining them. Nextel was one of THE worst cell companies out there - ever.
Sprint is actually only about 10-15% smaller than ATT-- roughly 54 million wireless customers vs ATT's 62 million. And yes, they are having their merger issues, just as ATT/Cingular did back after their merger of Cingular and ATT Wireless in '04. But like the Cingular-ATTW merger, they should come out of it, even though I do like to make fun of them in the meantime.
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Unless there are loopholes, but ATT and Apple don't tell anyone about the loopholes until the time's right. Because if said loopholes are known in advance, folks will be less likely to migrate to ATT to get the iPhone, and will instead 'wait it out'.
But if Apple and ATT instead agree to keep their mouths shut about it, its a win-win for both companies. ATT gets the full effect of the iPhone by acting like it has an uber-long exclusionary period, and Apple gets to sell to a much larger segment of the US market before the five years is up. Speculation, but money-wise, it makes sense for both companies.
Regardless of the details, I don't think a true 5-year exclusionary period is anywhere near the best Apple could do, simply because it makes no sense to be locked into selling to less than 30% of the US market for the very long five-year time period. I do not think Apple is foolish enough to leave billions on the table, therefore I think there's a good likelihood of a loophole somewhere.
Sprint is actually only about 10-15% smaller than ATT-- roughly 54 million wireless customers vs ATT's 62 million. And yes, they are having their merger issues, just as ATT/Cingular did back after their merger of Cingular and ATT Wireless in '04. But like the Cingular-ATTW merger, they should come out of it, even though I do like to make fun of them in the meantime.
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You're just guessing, you don't know any of this. I see no reason why either company should have agreed to a contract that allows either one to weasel out of parts of it.
That doesn't mean that if conditions change, parts couldn't be re-negotiated. That does happen.
You're just guessing, you don't know any of this. I see no reason why either company should have agreed to a contract that allows either one to weasel out of parts of it.
Well, that's the fun part. We don't know that there are any loopholes, and we don't know that there AREN'T any loopholes- perhaps for, say, a new Apple handset model that is a bit different from the iPhone, and which wouldn't be ATT-exclusive. ATT and Apple have not released their contract to be publicly scrutinized in detail, and I doubt they ever will. So all we can do is engage in some educated speculation.
Let's just say I will not be shocked if, two years or so from now, we 'suddenly' find out that the Apple-ATT contract is not as bulletproof as previously thought.
As to the reasons why the contract might've been written in such a way, I've already talked about that.
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I think the tough thing is to talk 3G providers into reasonable network traffic fees. I know in Sweden there are already "3G surf as much as you can, for a set monthly price" popping up. This should benefit a 3G iphone that is designed to use a lot of traffic frequently.
I dont think the true nature of the ATT/Apple deal has seen full light quite yet.
WiMax will be here inside of 5 years. You'll be able to use VoIP to make calls on your iPhone when that happens. Unless Apple completely blocks all VoIP software from their machine, which might be grounds for fanboy revolt.
I dont think the true nature of the ATT/Apple deal has seen full light quite yet.
Well, not your current phone, since it doesn't have WiMAx and doesn't have the ability to be updated.
It was silly, though, if its truly five years, no loopholes.
So, if it really is a bulletproof five-year US exclusive, Apple drove a fairly weak bargain. ATT needed Apple pretty desperately, and would be loathe to not only lose the iPhone, but also have a large competitor (such as Verizon or Sprint-Nextel) get the iPhone as a weapon to beat them about the head and shoulders with.
However, given that Steve Jobs is infamous for NOT driving weak bargains, I still have the sneaking suspicion that there is some kind of loophole in that 'five-year exclusive'. However, no one from ATT or Apple would want such a loophole to be known about, so I guess we're just gonna have to wait and see, eh?
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I don't think Cingular (who they bargained with, not the new AT&T) felt it needed Apple's iPhone to survive (come on, its a PHONE, not the greatest device ever produced by man!).
But beyond that, you're not looking at the whole deal. All you're looking at is "5 years exclusive" and calling it a bad deal. Look what apple got in return. They get a cut of the action (phone makers don't get that, normally). They get to control the phone, the UI, customer service, advertising, etc. Again, not something the cell companies normally give up. This is what Verizon balked at (most likely the sharing of the fees and the non-crippling of the phone). In my opinion, AT&T gave up a lot, and, in return, got a lot. That's part of a deal.
And how would you like to be AT&T and, after two years of working to promote and push the iPhone to the point where its about to explode (sorry, but I don't see an early explosion, not at $600 a pop), and then Apple says "Thanks for all the hard work, we're going to now sell it through Verizon and Sprint as well." It'd be like Intel giving Apple all that help to get OS X running well and optimized for x86, and then Apple going "Thanks. We're now going to use AMD chips!". If you do crap like that to your supposed partners, how many people are going to want to partner with you the next time?
But what I want to know what they'll do when there's a problem with the iPhone. Do we have to send it in and get it fixed? Will they replace it (doubt it). With my verizon phone, if something goes wrong with it within the first year (without regard as to cause or problem), I can take it in and get it replaced, no questions asked.
IIRC, one of the things apple wanted was control and say over the hardware (which will be great, because then Apple can say its AT&T's problem, and AT&T can say its Apple's problem, and it'll never get addressed!). Will Apple be replacing the hardware (along with syncing over all your data to the new one)? Will they want to repair it? What if you take it into the local AT&T store (since you don't have a convenient Apple store nearby, since you don't live in one of the 6 cities Apple decided to stick 500 stores in). Will they replace it, or have to send it in?
How many of you are willing to be without your phone/handheld computer for 3-5 business days? This isn't an iPod, here. People use their phone for critical daily functions. You can't just take it away for a week and say "But, you have an iPhone (when it works), stop complaining!" (Oh, wait, I forgot. Apple does that all the time with people's computers.)
I also want to know how solid this thing is going to be. My phone ends up hitting concrete A LOT. Is the iPhone's screen just going to crack the first time it hits the carpet? Will the screen actually be scratch resistant (as opposed, say, to ipod screens)? Keep in mind that, with everything on the screen, you can't get a case to cover the screen or the like, because then you can't use it!
These are the questions that need to be answered. Not "OMG, is it CDMA????" or "Will it have pay-as-you-go!".
I don't think Cingular (who they bargained with, not the new AT&T)
They're essentially unchanged. It was almost purely a branding thing.