Revisionist history Smokingjoe! Apple offered the iPhone first to Verizon. Verizon wanted to make all of the iPhone features available ala carte. You want Internet? That's extra? Visual voice mail? Extra! iTunes? Extra charge! Email? Extra! Notepad app? Buy it from Verizon. And they refused to upgrade their system to what was necessary to handle the iPhone.
AT&T agreed to an all in one price for everything and agreed to spend the money to upgrade their system.
Yes, and tried to charge them an arm and a leg for that "privilege". Verizon wasn't having none of that. Those are the “intolerable conditions” I was talking about.
As it is, Verizon is now doing quite well with the Android phones, especially the new HTC Incredible smart-phones, without the paying the King's ransom that Apple was asking before for their iPhone. Competition, and the free markets are wonderful things.
Look how much it was costing AT&T at the time.
“October 24, 2007 1:03 PM PDT
Piper Jaffray: AT&T paying Apple $18 per iPhone, per month
The exact details of AT&T's revenue-sharing agreement with Apple have not been disclosed, but one analyst thinks that over the two-year life of a user contract, the amount exceeds the actual price of the iPhone.
Silicon Alley Insider spotted a research note from Piper Jaffray’s Gene Munster estimating that Apple is receiving $18 per month for each iPhone subscriber, under the revenue-sharing agreement between the two companies. Apple has confirmed that such an agreement exists, but has not shared the details about exactly how much cash it's getting from the revenue AT&T makes on iPhone customers using the carrier's data network.
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iPhone users on AT&T's data network could be giving Apple as much as $18 a month under their revenue-sharing agreement.
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That would mean that over the life of a two-year contract, AT&T will pay Apple $432 per iPhone subscriber. Silicon Alley Insider adds the $400 in revenue per iPhone and uses iSuppli’s cost estimates to calculate a $565 profit per iPhone over a two-year period. I'm a little wary of those iSuppli numbers myself (they don't really account for things like research and development costs), but the exact number isn't really the point: Apple has a huge incentive to make sure iPhones stay on AT&T's network, even if Munster's numbers aren't perfect.”
http://news.cnet.com/8301-13579_3-9803657-37.html
Apple was taking $400 from AT&T for the iPhone itself, as well as another approx $18 per month from AT&T for every single iPhone subscriber. No surprise Apple's profits just kept getting fatter. Verizon wasn't ready for that kind of servitude.