During iPhone negotiations, Verizon and Apple fought over digital content and more

Thu, Oct 7, 2010


Expanding on its earlier report of a CDMA iPhone hitting Verizon in early 2011, the WSJ now gives us a few more details about the inner dealings, and disputes, that Apple and Verizon had to hammer out before inking a deal.

The Journal reiterates Apple’s plans to begin mass producing a CDMA version of the iPhone 4 later this year and notes that we can expect to see it in stores during the first quarter of 2011.

Verizon Wireless has been meeting with Apple, adding capacity and testing its networks to prepare for the heavy data load by iPhone users, according to one person familiar with the matter. The carrier is seeking to avoid the kind of public-relations hit that AT&T took when the boom in data-hungry iPhones overtaxed its network, especially in New York and San Francisco.

Before Steve Jobs unveiled the iPhone, Apple actually approached Verizon to gauge its interest in selling the device. Apple, as you might expect, had a series of demands that Verizon was simply unwilling to agree to, which then prompted Apple to run over and strike a deal with AT&T. Since then, we’ve heard vague reports of those meetings and how Verizon found Apple’s contract terms too overbearing. But now the Journal gives us additional insight into a few of the issues that stalled initial negotiations between the two companies.

For example, Verizon was steadfast in its refusal to prevent its retail partners from selling the iPhone – and if you’ve been paying attention these last few years, you’ll notice how the iPhone is only available from authorized AT&T outlets and not AT&T franchise stores. Also an issue of contention was Verizon’s refusal to give up its ability “to sell content like music and videos through its proprietary service.”

With the iPhone on Verizon now seeming like a sure thing, we can only guess that Verizon eventually acquiesced to Apple’s demands. Maybe Apple agreed to let Verizon’s retail partners sell the device, but there’s no way in hell Jobs would ever let Verizon’s digital content compete against iTunes.

Lastly, the report notes that Apple for a brief while toyed with the idea of launching a “worldmode” iPhone with a hybrid GSM/CDMA chip before settling on a CDMA only version of the iPhone.


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