“Movie studios and record labels have bent to Apple. But in the end, Apple bent to Cingular with a multi-year, exclusive US contract for an entire line of different iPhone models, Glenn Lurie, Cingular’s president of national distribution told journalists at the Consumer Electronics Show (CES 2007) today,” Sascha Segan reports for PC Magazine.
Segan reports, “When asked about a give-and-take leading to the Apple-Cingular partnership, Lurie said, ‘I’m not sure we gave anything.’ Later, he commented, ‘I think they bent a lot.’ That bending included allowing the phone to be locked to Cingular…”
“The contract covers ‘all models’ of the iPhone, including several other devices in the works that may be ‘coming out very quickly,’ Lurie said. His comment addressed in part a criticism that the iPhone doesn’t use Cingular’s new high-speed HSDPA network,” Segan reports.
Segan reports, “That isn’t true worldwide, as Cingular only exists in the US. Apple is free to seek other partners for global distribution, he said. And Apple is also free to build other iPods without phone capability that won’t be sold through Cingular—though he was unclear on whether a Wi-Fi only version of the iPhone would fall under Cingular’s thumb.
“While ‘there are bad guys out there that unlock phones,’ Lurie said, Apple and Cingular are taking unspecified steps to make the phone more difficult to unlock and use on other GSM carriers in the US,” Segan reports.
Segan reports, “The phone will be sold exclusively through Apple and Cingular stores, Apple and Cingular’s Web sites and Cingular’s direct-mail unit, Lurie said. It will not be available through indirect retailers, the ‘Joe’s cell phone shop’ you see on every street corner—though Apple is free to go to big-box stores like Target and Wal-Mart, Lurie said.”
More in the full article here.
Related articles:
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Apple iPhone tops Amazon’s bestselling electronics list in Germany – January 13, 2007
BusinessWeek explores ‘the real genius of Apple’s iPhone’ – January 12, 2007
Wired News: Steve Jobs’ iPhone shows the future – January 12, 2007
Cringely: Apple iPhone will suddenly go 3G, gain features, and be renamed ‘Apple Phone’ – January 12, 2007
Apple’s Phil Schiller gives CBS News hands-on tour of iPhone – January 12, 2007
20 unanswered questions about Apple’s iPhone – January 11, 2007
Report: iPhone could be upgraded to 3G with software update if Apple wishes – January 11, 2007
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Something tells me Steve isn’t going to be thrilled with the exact wording of this statement. Sometimes it’s just better to STFU, Mr. Lurie!
Any bets that after those comments Apple WON’T be renewing the agreement after it expires!!!!
Kinda sounds like a pissing contest doesn’t it?
what an asshole
What good can possibly come from saying that. The bottom line is that the success of this deal will depend on how many customers buy an iPhone. Boasting that Cingular got themselves a good deal and supposedly bent Apple to their will does nothing from the consumers point of view – what do they care about the negotiations? All it does is piss of Apple.
” . . . including several other devices in the works that may be ‘coming out very quickly,’ Lurie said.”
OOPS! Steve just flew out the door with a ball gag in one hand and a rubber mallet in the other. Phil Schiller fainted.
I’m not based in US, but Cingular CEO stuck out like a sore thumb at MacWorld last week. I can’t believe why Apple would want to associate with him. Compare him with Dr. Google and trendy Yahoo Yang.
What a jerk.
I hope he gets “steved”
See what I mean about this chickensh&t company. I despise Cingular and all U.S. cell phone companies. They treat consumers with no respect at all.
“BAD GUYS” unlock phones?
What if I want a fricking unlocked phone?
Mark my words. Cingular is going to rake anyone who wants one of these phones over the coals.
“I’m sorry, your contract with your existing phone that does not work is not up yet. If you want the new Apple Phone, you will have to wait or pay $1500, thank you for being a Cingular customer for the last 10 years.”
so what. Quit acting like Apple is god. They are a company whose stock was $17 not that long ago.
Cingular’s board approved a deal without ever seeing a prototype of iPhone. Does that imply Apple bent in contract negotiations or not? It sounds more like Apple holding the cards, showing those needed to be shown and then making Cingular think they have the upper hand. If Cingular had been so superior in business negotiation, they would have been able to force Apple to put down all the cards on the table and make sure everything was covered instead of having to take a leap of faith.
To me, it sounds more like he’s taking some of the heat off of Apple for limitations like (currently) no high speed networks and the DRM forced on the iPod portion by the record labels. Apple can now simply point to the phone companies and record lables when anyone complains about any feature they would like that isn’t in the phone.
What does ‘multi-year’ contract mean? I can’t believe Apple would sign up for more than 3 years. Those guys at Cingular obviously have as much style as the product they sell.
I agree with the previous posts; Apple will change partners if Cingular doesn’t behave, and I can’t believe Steve Jobs didn’t secure Apple’s interests in the agreement he made with them.
Apple always has the last laugh. Ya think these bozos are smarter than Steve Jobs?
“Quit acting like Apple is god. They are a company whose stock was $17 not that long ago.”
Exactly. God (sym: GOD) would have split again by now.
This sounds like everything that’s bad about the cell phone industry in the US has been built in as a FEATURE of the iPhone. As potentially the most popular cell phone ever made, that means this disfunctional business may never straighten out.
Thanks a lot Steve. Way to hang tough for the little guy.
And it’s so pointless to boot. With all the technology and business plans out there that already make cell network providers utterly redundant, why the f**k are we reading this stuffed-suit from Cingular gloat about bending Jobs over the bedpost? The iPhone would sell if it was operating on a network of string and tin cans, for chrissakes! Apple is supplying him with the best thing to ever happen to his company – ANY cell phone company – in this decade, and yet, apparently, Apple rolled over so badly that he now thinks Cingular was in the driver’s seat all along.
What in the world was Apple thinking?
I think I might throw up a little.
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Cingular is now going to become ATT. I dealt with Suncom a few years ago which was also ATT and despised them. I would love to have this phone, but I WILL NOT be a Cingular or ATT customer ever again.
The bottom line is that the cell phone service providers are all big business that has no concern for what we as consumers want. We want the iPhone unlocked! I guess that makes me a bad guy.
3 years is probably it.
Then Cingular can grab their ankles and spell R U N. cause Apple will have the bigger end of the stick at that point with every other carrier just waiting at the door. Or it can simply unlock the device and sail free.
I don’t think it’s fair to single out Cingular. They are no worse than any of the other US carriers, and it is the US consumers’ own fault.
Everywhere else in the world people actually BUY their phones. Here, we expect to get something for free. Clearly nobody learned from their parents that nothing in life is free. In return for the “free” phone, the wireless companies get the power to treat you like crap, since they know you can’t leave (actually you can, you just have to pay for the damn phone you should have paid for in the first place).
Why consumers here in the US are so stupid is beyond me.
Apple probably has some clause in the contract that if Cigular makes outrageos claims such as this one or reveals anything regarding new products, that violates the agreement and gives Apple the out or leverage they need renegotiate — or as a previous poster put it — they may get “Steved”
The cell phone companies are such idiots. Where do they get off having people sign contracts for 2+ years for a new phone. What if the landline companies required you to do the same thing if you got a new phone. It’s insane. We should start a petition or a class action lawsuit against this.
What if I want a full-screen iPod and WiFi web, but not phone functions – am I forced into a phone contract? Maybe I just won’t send in my details to Jugular.
critic is correct. We here in the good old USA need to adopt the European model before the cell phone companies can chock us even harder. But when you have a 4 company monopoly, to in each range, it’s difficult.
im still a bit mystified why it doesnt use the high-speed HSDPA network. I doesnt say in the article why this is.
why wouldnt you want this thing running on the fastest network possible?
i dont actually want a phone (im far to important to be contacted)
i do want a portable os x based website viewer, emailer, camera, ipod, game platform
Locking phones is so ridiculous. After the 2 year contract has expired, can I have my phone unlocked?
I travel overseas regularly, and use SIMs from different phone companies because it’s a lot cheaper than using the roaming option (although the phone number changes, this is a minor inconvenience as I make more calls than I receive.) Doing things this way requires an unlocked phone.
Why make a quad-band if it’s not intended to be used as a world-wide phone? It’s not a feature to the customer if it’s not used to its full potential.
” . . . am I forced into a phone contract? Maybe I just won’t send in my details to Jugular.”
If you don’t, they’ll probably keep calling that phone until you do. But only between 7pm and 6 am and on weekends.
critic
I agree, there is no such thing as a free luch, and because the US is so insular, they have no idea of what is availble in in rest of the world or what other technologies exist out there, they would be shocked to talk to a Korean teenager or Japanese one. International travel is a great way to put one’s country in perspective; the sooner you do i the better of you are
This may be the key:
“though he was unclear on whether a Wi-Fi only version of the iPhone would fall under Cingular’s thumb.”
Heh heh. That tells me how Cingular might get Steved:
Apple produces an iPod that isn’t a cellphone by the definition of their contract with Cingular and only has a data connection to the net but… The new iPod uses iChat for text, voice and video communication with other iChat users (and phone users).
Ever heard the old expression, “Cutting off your nose to spite your face”? He won’t be bragging about this in a few years.
If you remember, when Apple started iTMS it was the labels that thought they had the upper hand. And they actually did. None of the labels thought iTMS was going to be a smashing success.
Now look where the labels are.
“While ‘there are bad guys out there that unlock phones,’ Lurie said, Apple and Cingular are taking unspecified steps to make the phone more difficult to unlock and use on other GSM carriers in the US,” Segan reports.
You have got to be kidding. DVD’s locks were broken in what a day? I’m guessing the phone locks will be broken in a couple of days. Besides, most European phones are not locked, so when I’m in the UK next year, I’ll pick one up. No, I’ll pick up two, one to eBay and pay for the one for me!
Lurie’s eating of humble pie will be starting in a couple of hours.
This sounds like the Disney/Pixar deal. Cingular will wish it had played it’s hand better and more fair in dealing with the iPhone deal. Look back at the Disney deal with Pixar. It looked like Disney (in the begining) had the upper hand and they did, but Disney didn’t count on Pixar becoming so popular and in the end Jobs played the better hand. Look out Cingular in a couple of years you will not be the sole player in this iPhone market and you with you would have bent more for Apple Inc.
These phones will be for those who can afford the initial cost and use Cingular. There will be plenty of first time adopters for sure. Neither company will lose out in the short term.
Did you see the CEO for Cingular. The guy had to read from a script. What a lamearse. Very different attitude to presenting products.
Once the iPhones start selling in volume the price will go down and Apple will open up to other vendors in the US. Will probably take a few years though.
Hmmmm, it sounds like that Cingular CEO is as big a fool as he appeared at the Expo.
Cingular had to develop that video e-mail and interface it with the new iPhone system. And I am guessing much more. When it comes to CEOs and telco, you have to assume that there is not too much in the way of smarts.
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N.
I wonder if the Cingular statements have violated any non-disclosure agreements about future products?
Cingular’s hubris is annoying.
In other words, Cingular made Jobs their little bitch.
Cingular’s CEO presented so poorly at the keynote in contrtast to Jobs, that he feels compelled to attempt to regain an equal or superior position to Jobs by proclaiming that he made Apple bend, i.e.made Jobs bend over.
In other words, Don’t drink the koolaid has reappeared as Uh Oh.
There is no point getting upset about locked phones. If Cingular is going to spend money promoting the iPhone (which i am sure they are) and they are going to subsidise the cost of the handset (we can assume that they are) then they need to know they are going to continue to get the income from the handset.
It may also suit Apple – if Cingular are going to work with Apple to develop services and capabilities which only the iPhone will be able to exploit then it may suit both companies to lock in the handsets.
If Apple pursue the same approach to telephony as that they have deployed in iTunes/iPod, then they will want control of the whole experience. Since they have no telephony expertise or capabilities, they have to partner – but why partner with everyone when Apple need only work with one partner? Much simpler to manage!
If the iPhone works, perhaps Apple will buy a Telco. They have plenty of money sloshing around… an iTunes/iPod model would see Apple providing the service (Telco) and the product (range of iPhones).
He does not want to be seen as yet another CEO that let his company give Apple control, as everyone perceives with the music industry.
“And Apple is also free to build other iPods without phone capability that won’t be sold through Cingular…”
Wow. Man, I’m sure Apple is glad they got out of the building with that one! As if that was even the remotest of possibilities.
Dingular bent over a bit more if you ask me. They re-engineered their shitty voicemail to work the way Aplle wants it to work. Like Cingular wasn’t falling all over themselves to get hooked up with Apple. They’re the perfect company to use while Apple works out the bugs in the initial iPhone release. Isn’t Fingular the company that does the “fewest dropped calls” commercials? Well, bullshit. I’ve had more dropped phone calls and crappy reception with them than I ever did with T-Mobile.
I don’t get it, I thought Congress ruled not so long ago that carriers can no longer lock the phones they sell to their network?
How can Cingular lockt the phone under this perspective?
Source at the Library of Congress (among many if Googled):
http://www.copyright.gov/fedreg/2006/71fr68472.html
I think Apple is going to (and should) fuck Cingular up the ass on this.
Just buy an unlocked phone from europe when they become available. I have Cingular but I use an unlocked phone that came out of Germany.
I’ll be buying an unlocked version this time next year. The upside to that is by then I should also be able to see the other versions that are coming out. Usually the first versions are the most expensive. BTW, Cingular isn’t nearly as bad as people make it out to be.
One more thing. Who would Apple go with in the States besides Cingular? They are the biggest that allows the iphone to still be compatible with other parts of the world once unlocked. From Apple’s point of view Cingular makes the most sense.
This is incorrect. Example: France, UK, Spain, Japan.
Carriers subsides the phones to attract customers.
The differentce between the US and the rest of the world is that phones being sold here in the US are lagging their counterparts in terms of features, though that gap has been reducing over the last year or so.
The only carrier that deserves business in the US is T-Mobile, for being well-priced and having good customer support. Their “3G” network isn’t ready but it’s being built now. I would not give any business to Verizon, Sprint or AT&T aka Cingular, iPhone or not.
“Comment:
From: critic
Jan 15, 07 – 12:40 pm
I don’t think it’s fair to single out Cingular. They are no worse than any of the other US carriers, and it is the US consumers’ own fault.
Everywhere else in the world people actually BUY their phones. Here, we expect to get something for free. Clearly nobody learned from their parents that nothing in life is free. In return for the “free” phone, the wireless companies get the power to treat you like crap, since they know you can’t leave (actually you can, you just have to pay for the damn phone you should have paid for in the first place).
Why consumers here in the US are so stupid is beyond me.”
The whole system selling cellphones with prefixed operator is stupidest idea I’ve ever heard.
Can someone please answer this:
Comment:
From: Richard Franco
Jan 15, 07 – 03:16 pm
I don’t get it, I thought Congress ruled not so long ago that carriers can no longer lock the phones they sell (with or without a contract) to their network?
How can Cingular lock the phone under this perspective?
Source at the Library of Congress (among many if Googled):
http://www.copyright.gov/fedreg/2006/71fr68472.html
I think Cingular and the rest of US carriers are going to find out that the iPhone is their “Trojan Horse” We’ll see who gets bent!
The problem with phones is that they can get outdated quickly. The buy cheap or free lets you go for a tech and be locked in for a year or two.
I wonder how much Cingular are subsidizing the iPhone?
The CEO of Cingular that talked during the Stevenote is named Stan Sigman.
The jerk with the big mouth (Glen Lurie) is the (maybe soon to be ex-) president of Distribution. In other words – nobody.
A look at the incorrect and inflamatory headline explains the mis-inderstanding of all the responders. Nice Job MDN. Since you clowns are the first to jump on anyone making an erroneous statement…..
“He does not want to be seen as yet another CEO that let his company give Apple control, as everyone perceives with the music industry.”
That didn’t happen. The music industry did make Apple do what they wanted with iTMS…in the beginning. Since then it’s been the marketplace (consumers) that gave Apple what control they now have.
“A look at the incorrect and inflamatory headline explains the mis-inderstanding of all the responders.”
Hmm…no. 1) You’re correct about the headline being incorrect, but that doesn’t necessarily make it inflammatory. 2) You may be mistaken about any (in your opinion) misunderstanding of the responders.
I can only speak for myself, of course, but I did read what came after the deadline so I misunderstood nothing. Regardless of what his position with Cingular is, and because of his position with Cingular, Lurie’s comments were totally inappropriate. If he gets canned, it will be because his superiors will (rightfully) consider him a liability.
Although, personally I would give him a serious demotion rather than firing him. After all, one should take his comments in the context that they were made at CES.
I worked for a company which joint ventured with a Bell co. They were so caught up with office and desk sizes for different superior classes of management that they stifled free thinkers. This Lurie prick is typical. Steve, get rid of Cingular, ASAP.
Smells Like Teen Troll Spirit: Who the hell is Don’t Pass the koolaid??
This idiot sounds like all other DRM/Music Industry/Cell Carrier scum that we’ve all come to know and hate. I agree, with that attitude and those words, Cingular (AT&T) just f*cked themselves where The Steve is concerned.
i’m definitely cancelling my verizon contract so i can get my hands on an iPhone. I’m sure Cingular did some bending over to make the deal with Apple.
Just wait and see… in two years this phone will be the most popular in the U.S. at least (supplanting the RAZR, which came up just as quickly) and the tables will be turned. Even if Cingular was in control of this deal, they won’t be for long. Same as with the record labels.
–mAc
Can Cingular legally lock the phone or not?
I’m from france and never bought a locked phone. Even I really want it I won’t buy it if it’s come locked.
It would be intereting if Apple released a multimedia iPod with iChat that didn’t make calls through the carriers – maybe even a skype phone! That would put the pressure on Cingular.
Wi-fi iChat would be an iPod/iPhone’s killer app for me. Now that the product has been revealed, we might see competition amongst carriers in other markets. If only one of them allow unfettered ring tones and apps like iChat, they might just earn a multi-year exclusive contract. If we could find at least two of them in one market, life would be even sweeter.
We know where the future lies: VOIP. Steve’s always thinking ahead.
MW: right!
The new iPod with VoIP would kick ass. If they included the module like you can buy for your laptop for cell carrier data access you’d have access to the cell networks with no charges for individual calls….and it wouldn’t be a cell phone….Screw minutes and plans. $59 or $49 bux a month flat. Ouch. Then you can skype over the data network and have an unlocked phone.
Personally, I’m going to wait until they get up to 30 gb or so before I dive in. I have a 3g iPod and that would suck to have to start screwing around with my library to sync. Damn sexy little gadget though. The RAZR is such an annoying piece of shizznit. It is amazing how something so sleek and stylish could get so ugly when it’s hard to use and doesn’t work very well.
I’m not too concerned about how many GB the iPhone has.
After .mac becomes your .mac virtual network computer, your iPhone, your Mac, your AppleTV and yet to be announced toys and tools will become different interfaces to the same “computer” — local caches with high speed access to your data. I woudn’t be too surprised if you could open your .mac vm on a Windows or Linux box from work someday.
And you wouldn’t need a laptop module for cell carrier data access — Just a connection to the iPhone from the laptop.
why apple only sell unlocked iphones and then all carreirs compet for the visual voicemail?
“I hope he gets “steved””
Sounds like Steve got Luried…
What’s wrong with a CEO stating that they drove a hard bargain with a partner in a relatively weaker bargining position. After all cellphone networks require a huge investment to put together. Apple needs these guys more then they need Apple. You can bet if Steve had a better offer from someone else, he would have taken it.
“The whole system selling cellphones with prefixed operator is stupidest idea I’ve ever heard.”
It’s just another way of paying for the phone.
So in the USA you can either get a cheap locked phone, and pay for it over time by being locked into the contract, or buy your own handset and still be locked into the contract. You are so smart if you’d prefer the latter.
When you look that prices of high end handsets in Europe compared to the US, the US model starts to make some sense.
Shouldn’t the title be “we made apple bend OVER?”
There used to be a time when only pay-as-you-go phones were simlocked. Because when I pay for a contract phone I want to do whatever I want to with it. Even if I don’t make a sinlge call I still pay for it.
“What’s wrong with a CEO stating that they drove a hard bargain with a partner in a relatively weaker bargining position.”
Poor taste, for one thing. And for another, what makes it so? Just because Lurie said so? I think that’s just Lurie’s wishful thinking, or posturing.
Cingular drove a hard bargain? Doubtful, considering they took on the iPhone without even seeing a prototype.
“After all cellphone networks require a huge investment to put together.”
So? That’s just another business expense of theirs.
“Apple needs these guys more then they need Apple.”
The why did Cingular take on the iPhone without even seeing it?
“You can bet if Steve had a better offer from someone else, he would have taken it.”
I think Steve wanted most was an “in” to the mobile telco business. And Cingular handed it to him. Verizon was out because they would never sell the iPhone (that Jobs demoed) without crippling its most compelling features. Who does that leave, T-mobile? Their service area is a joke.
I love how people post about these sort of things as though one party (or the other) walked away with all the cookies and really stuck it to the other guy. Companies like Apple and Cingular have negotiations. One side takes this, the other side takes that. One side gives this, the other side gives that. With companies like these, no one makes anyone “bend over.”
Except the lawyers… who make everyone “bend over.”
“When you look that prices of high end handsets in Europe compared to the US, the US model starts to make some sense.”
You are the only European I’ve ever read who said that. Every other European that I’ve read who posted about this, has said the exact opposite.
Cingular drove a hard bargain? Doubtful, considering they took on the iPhone without even seeing a prototype.”
Now where’s the risk? iPhone flops, Cingular happily sells other handsets. iPhone suceeds, Cingular has some years of exclusivity. Either way Cingular wins.
“So? That’s just another business expense of theirs.”
The point is Apple needed someone with existing infrastructure. there’s no way they could justify the cost of a US wide cellular network just for the iPhone, or build it out in any rational timeframe.
Apple chose GSM, because it gets them into most of the world’s cellular markets with one handset design.
So when you go GSM, you come up with a very short list of partners, Cingular and T-Mobile. Verizon was out due to technical incompatibility.
PS. They said Apple bent, not bent over. shesh.
The negotiations go something like this: Steve: Hi Glenn, we have a really neat product called the iPhone that we’d like to develop, it’s going to be GSM because so want to sell it worldwide, and we really don’t have the experience or resources to develop multiple models for each different network type like the big boys. Glenn: Sounds like you need a US GSM provider to work with and we have way more coverage than T-Mobile. Steve: Sounds like you’re right Glenn, you’re really the only choice, would you like me to hold my ankles now?
Comparing the US cell phone market to Europe or even more ridiculously, to S. Korea or Japan is ludicrous. How many cell phone towers does it take to cover Japan, three? (I keed). But seriously, just like with our transportation system, our cell phone networks cost huge amounts of $$ because of our vast expanses of territory. Likewise, people talk about how wonderful the European transit systems are and wonder why we don’t have a similar counterpart. When I hear this I have to wonder, have these people ever looked at a map?
As long as US cell companies have to try to cover hundreds of thousands of square miles of territory, our service contracts will be expensive and our options will be limited. If you think we need to have more options, GO OUT AND START YOUR OWN CELL COMPANY! I may give you a try after you’ve spent millions just to get your first tower built.
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