Verizon talks about negotiations with Apple on Verizon iPhone

Verizon iPhone - Verizon Website Announcement

Bloomberg sat down with Verizon President Lowell McAdam who was on stage with Tim Cook during yesterday's big Verizon iPhone announcement, and their discussion sheds some light on some of the negotiations held between Verizon and Apple that led to them finally carrying Apple's flagship smartphone. Here are some quick highlights, beginning with McAdam talking about their branding and logo missing from the device itself:

To reach a deal, Apple and Verizon had to reconcile different approaches to branding. Verizon puts its stamp on other manufacturers’ devices, including phones from Research In Motion Ltd. and Motorola. By contrast, only Apple’s name appears on the iPhone.

“They don’t put a lot of logos on their phones,” McAdam said in the interview. “So that wasn’t a major issue for us.”

Former Apple exec Jean-Louis Gassee chimed in saying that Verizon probably saw the success of the iPhone under AT&T and quickly agreed to requests from Apple on excluding carrier branding. Given the amount of crapware and branding on every other phone under Verizon, we have a feeling this was more difficult for Verizon to agree on than McAdam would like you to believe. But did they ultimately have a choice?

In addition, last year's reports of Verizon cell towers on Apple's campus turned out to be for testing the Verizon iPhone as most had assumed.

The companies erected Verizon cellular towers at Apple's Cupertino, California, headquarters to check the phone's signal and avoid the reliability troubles of the iPhone at AT&T.

The most interesting thing to note, however, is that most of the negotiations took place between Apple COO Tim Cook and McAdam himself, without much input from Steve Jobs unless it was really needed. Verizon and Apple worked together for over half a year on the technical hurdles they faced before deciding the device was ready for primetime.

"We probably worked six or nine months on the technical side of this and saw we could make this work," McAdam said. "Then we did the commercial side. The commercial deal took us a day."

It's interesting to see how things played out leading up to the Verizon iPhone event on Tuesday, especially when it comes to the technical and branding issues involved. Now that it's finally here, how do you think it will sell in comparison to AT&T? Let us know in the comments!

[BusinessWeek]

Andrew Wray

Andrew Wray is a Salt Lake City, Utah based writer who focuses on news, how-tos, and jailbreak. Andrew also enjoys running, spending time with his daughter, and jamming out on his guitar. He works in a management position for Unisys Technical Services, a subsidiary of Unisys Corporation.

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There are 36 comments. Add yours.

Mr.mars says:

One more month, and its mines

bmxfreak995 says:

YES so many people on Verizon have been waiting for the iPhone. many people may not rush out to buy it because they are stuck in a droid contract but over time the iPhone i think will be the popular phone for many on Verizon.

jwriherd says:

CDMA turns it into a dumbphone. "yes I'm on the Internet on my laptop thru the Hotspot wifi, wait never mind someone is calling me..."

Mr.mars says:

Lol but still, less than a month

chance says:

as apposed to "I'm sorry i had to call you back yet again"

lcargile says:

Haha, @chance. True true.

Stevo2244 says:

Ok... I think people get it, Verizon is on Iphone this isn't a big deal

rjmorris72 says:

Better I gotta call u back than the phone not work at all because att is absolute garbage in atlanta.

iBlackdude says:

How come nobody told me that it's possible to buy an iphone4 at the apple store without contract ?????
I just found out TODAY

Robes says:

And the hate continues! Some people must really have a lump in their pants for AT&T! LOL!! What good is simultaneous voice and data when your call drops before you say hello? LMAO! I have an At&t iPhone and yes, the 3G map is like a porn movie where the star is one inch long! LMAO! Just not gonna be enough! I look forward to giving the Death Star the finger and jumping ship in less than a month! Honestly how often are you driving and talking while using Navigation? Better yet..Are you really lost that often?! LMAO!!!!

Greg Foster says:

You do realize you can't even receive MMS while on a verizon call right? NO DATA MEANS NO DATA.

lmao says:

I can make calls just fine on att. I haven't had a dropped call in over a year.

Benjamin Woodruff says:

I'd like to see some stats regarding the educational backgrounds of users from different platforms. Sure, plenty of variety exists among users of each smart phone group, but I think there are some biases developing in the public's mind about users of the iPhone vs. Android and other platforms.

uberspeed says:

Sorry, "bended" or bent?
On topic I'm glad this finally happened, let's see how the lack of SVDO affects things and if the VZW network actually buckles any; they certainly have had time to prepare and learn from ATT's mistakes.

GinoDotCom says:

I hate AT&T as much as anyone. Dropped call after dropped call here in NYC. Nonetheless, it wouldn't make sense to switch from my current iPhone4 to a 6 month old phone with iPhone5 on the way by summertime. Plus a hefty termination fee for practically us all.
As long as Verizon gets the iPhone5 the same time AT&T does, I'll be switching 100% to Verizon 100% (as long as unlimited data still exists)
Screw talking and textin at the same time, I can't even hold a call.

OrionAntares#CB says:

Actually if you're only texting you can do that at the same time as holding a call. Voice calls and SMS run through the same channel.

tuscanidream says:

Hell no I will not switch to verizon or the verizon iPhone. "Hold on. Let me call you right back with that address. I have a smart phone that is dumb and can't go online at the same time." Multitasking is the whole purpose of having a smartphone. If you can't go online and be on the phone at the same time, then it's pointless in my eyes. And I switched from verizon. When they claimed that I voided my warantee on a piece of crap phone because the loosely fit battery wore a hologram off the back of the phone, I lost it! Last straw with them!

moody says:

I don't get why ppl such a big deal about this. Droid owners use more data on Verizon's network now and never complained about this feature at all. Its just stupid. Oh and by the way android is smarter than ios.

jwriherd says:

10 to 1 Vdub gets iPhone 5 late, like most CDMA version phones come late to carriers. I have AT&T and barely get dropped calls in LA area and im on a call often and need to look something up on the net. I always have faster dl speeds and load times than htc incredible. CDMA is terrible.

Mrs B says:

With all the hopes and dreams riding on the Verizon iPhone to be far superior to AT&T's this could be an epic fail for Verizon!!

dloveprod says:

I look up stuff while on the phone all the time so it doesn't work for me, while I'm talking to friends I check showtimes look up places to eat, get feedback, people with dumbphones call me to look up stuff for them and I can complete it without hanging up and calling them back

Greg Foster says:

Just to address some stuff on AT&T vs Verizon. When the Moto Droid first came out, I had one and my iPhone 3G. If you're not on wifi with Verizon, no data means NO DATA, so you can't even receive an MMS while on the phone. AT&T, CHECK!!! The voice quality on VZW is reprehensible in my opinion, clients would literally ask me to call them back from another phone. I ended up dropping out of my Verizon contract 23 months early because everything was so bad with them. I've been with AT&T through mergers and transitions for going on about 8 years now I guess and I've never had major issues. So...if you guys wanna free up some bandwidth...by all means, please go to verizon. PLEASE.

Matt(sZ) says:

Verizon really bowed to Apple's every demand on this, no branding, bloatware, and most likely they had to eat the cost of the more expensive CDMA parts, Verizon has tons of phones that outperform the iPhone, what exactly DID Verizin get out of the deal besides the phone itself? Verizon just effectively said that the iPhone is superior to every other phone they carry.

Entertainment72 says:

IPhone IS and has always bren superior, Verizon always knew this.

Shrike says:

Verizon lost contract negotiations with Apple because iPhone on ATT by itself outsells all smartphone sales on Verizon. Speculation is that it outsells Verizon Android phones by 2x to 2.5x. In addition, Verizon's smartphone penetration is less than ATT smartphone penetration. Penetration as in percentage of people on the carrier with smartphones versus dumbphones.
We don't know the details, but at least one thing is very true: ATT has increased subscribers at a faster rate than Verizon. And in calendar Q3, it was basically a statistic dead heat. This is after Verizon having an ~8m subscriber lead after the Alltel merger.
So, what is Verizon getting? More smartphone contract sales at $70 and up. They hope it is 2 to 3 million per quarter to match or defeat ATT in subscriber growth. All told, it could be $1 billion revenue per quarter.

OrionAntares#CB says:

Not really. There actually are other current phones on Verizon that went through without bloatware and/or branding. I'd believe that part of the negotiation went as smooth as they said.

Chance says:

What VZW has done is take the focus off the device and back on the network, largest 3g coverage, most reliable voice network with the highest call completion rate and fewest dropped calls. Now the choice isn't what phone to get but what network to get that phone on. One where you might be able to make calls or one you know is going to complete your calls. For people who are worried about VZW being able to handle the data, most android users use more data than iphone users and in 2008 and 2009 VZW carried twice the data on its network than att did.

Bohica says:

Some areas have good coverage by AT&T, but I am in the Los Angeles area and it sucks. My friends are literally begging me to switch due to my constant dropped calls. Even on major freeways, I frequently drop calls. Inside buildings, I typically get no signal. My work issued Verizon phone is far more reliable.
No simultaneous text and data? Still better than no signal or constantly calling people back because AT&T can't hold it together.

Charlie says:

I'm grateful Apple won't allow the Verizon logo - truly one of the ugliest out there.

Nick says:

All this data talk is just funny. I seem to remember when ATT switched to the new cap and there was a poll. People didn't mind the cap because majority of the time they were on wifi. There is your Voice and Data, no worries. Android users haven't complained, I'm sure iPhone Verizon users won't as well.

junior760 says:

i wanted to switch to at&t and get the iphone but i kept reading stories that the iphone is coming to verizon for like months or a year or two.. so i decided to stay with verizon, i had a crappy blackberry so i canceled that phone switched to a cheap phone and the cool thing was that i was eligible to get an upgrade on 1/11/11 when they finally announced the iphone to verizon so yessssss im so happy i dont care about data and voice or anything else i've wanted an iphone forever so ima get it so make your choices people cause im getting mine no buts about it!!!!!!!

Roshambo says:

wjhy cant the iphone 4 use both calk and web simintaniously? software or cdma towers because dads droid x can do both at same time

Devinfowlkes15 says:

I Been Waiting For A iphone Since 07 I Got A BlackBerry Storm 2 Been Happy And Feb 3 I'm pre Orderinq My iphone By crackberry For Me. Apple Fan Now

Drake says:

CDMA is a dying technology and we all know it. No voice/data, worse battery life, and slower speeds. And not as internationally accepted as GSM.
I'm sticking with AT&T. Partly because I am in a contract and partly because I'm one of the few that's happy with their service. I get 3G coverage now, and I've only dropped a call once or twice in the 2 and 1/2 years of being on their network.

iphone says:

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