Verizon rebuffed Apple on iPhone distribution deal

Cingular may not have been Apple's first choice of mobile phone service provider, says a report in USA today.

Apple had been in talks with Verizon Wireless, who could not accept Apple's stringent terms that seemed to give the Cupertino-based company full control.

According to Verizon, the deal was in discussion almost 2 years ago, but Apple wanted a percentage of the monthly service charge, and control over where the iPhones would be sold.

Steve Jobs wanted hard control over iPhone distribution, and specified that Apple and Verizon could sell it, but that other distributors may have been left out.

“That would have put our own distribution partners at a disadvantage” to Apple and Verizon stores, said Verizon VP Jim Gerace.

In terms of customer care, Apple also wanted complete say and the power to decide whether a phone should be replaced or repaired. Verizon wasn't willing to give up the link to the customer.

Cingular may have agreed to similar terms to secure the distribution and service deal, and analysts believe it could be a 5-year contract that the companies have signed.

The mobile phone service provider would not say whether Cingular distributors like WalMart and RadioShack will be selling the iPhone.


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