Today’s issue of USA Today says that Verizon Wireless turned down an offer from Apple of exclusive distribution of the upcoming iPhone, because Apple had too many demands: a portion of the monthly fees and control over who could sell the phones. Jim Gerace, a Verizon Wireless v-p, told the newspaper that Apple demanded control of the relationship with iPhone customers, including sole discretion over iPhone warranty and replacement issues (although it’s not clear if that includes phones sold by Cingular). The remarks indicate the critical role that Apple’s retail stores will play in the iPhone roll-out, and hint at the additional burden that iPhones will place on the Genius Bars and sales staff. In the same article, a Cingular exec said the company will be handling wireless network problems for the phones.
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iPhone hardware will be supported by Applecare and the Mac Genius staff. In addition, Apple will have Applecare for the phone. Not sure if it will be 2 year (like iPod) or 3 year (like CPU’s). This is yet another expense Apple saves Cingular. Unlike Motorola, Nokia, etc, who just dump their phones to carriers and have no further obligations after that, Apple will support the phone for it’s life and take on all costs to do so. This frees up Cingular to slash data service prices for the phone as well as offer large incentives (free or discounted services) to increase market share. Once again Apple is looking to revolutionize an industry that it feels it can drasticly improve. They will do so with customer service, and inovative easy to use designs such as the iPhone.