After it was reported that Apple teamed with Cingular Wireless to distribute its new iPhone, the news has surfaced that Verizon actually passed on the deal two years ago. Verizon squashed the deal because of Apple's rich financial terms and other demands, according to USA Today. Apple reportedly wanted a percentage of the monthly cell phone fees, decision making power over how and where iPhones could be sold, and control of the relationship with iPhone customers. "We said no. We have nothing bad to say about the Apple iPhone. We just couldn't reach a deal that was mutually beneficial," said Jim Gerace, a Verizon VP, according to USA Today.
Gerace also said that customer service was another bone of contention, because if an iPhone malfunctioned, Apple wanted sole discretion over whether to replace or repair the phone. "They would have been stepping in between us and our customers to the point where we would have almost had to take a back seat… on hardware and service support," said Gerace.
Cingular has not revealed the financial terms of the deal or how long it is allowed to exclusively distribute the iPhone, but sources told USA Today that it's a five-year contract. The device will ship in the U.S. in June and will arrive in Europe later in 2007 and in Asia in 2008.
Mark Siegel, a Cingular spokesman, said, "We think this is a win for Apple, and it is a win for Cingular." He also said that Cingular would be the one to field calls related to the iPhone wireless service, but would not say whether Cingular distributors such as Wal-Mart and RadioShack will get to sell the iPhone as Cingular and Apple stores will.