Apple, Verizon took years to settle iPhone issues

Adam Satariano and Peter Burrows
Bloomberg Businessweek

Verizon Communications Inc. President Lowell McAdam works a few miles from the New York auditorium where he announced yesterday’s deal to offer Apple Inc.’s iPhone. It took him four years to get there.

The press conference at Lincoln Center marked the end of haggling over branding and revenue sharing between the two companies, as well as efforts to ensure reliability. McAdam and Apple Chief Operating Officer Tim Cook came to terms last year, setting the stage for Verizon to offer the iPhone on Feb. 10.
 
The companies’ detente underscores Verizon’s desire to offer one of the best-selling smartphones, even if it means ceding more control than usual. Apple, meanwhile, gains access to the largest U.S. wireless carrier. That may help maintain its ballooning sales growth and stave off competition from Motorola Mobility Holdings Inc. and Samsung Electronics Co., which use Google Inc.’s Android operating system.
 
“We said over the last three or four years that the business interests would come together -- and they did,” McAdam, who is in line to be Verizon’s chief executive officer, said in an interview.
 
Since reaching their agreement last year, the companies have been testing a version of the handset that will work with Verizon’s code division multiple access, or CDMA, technology, McAdam said. AT&T Inc., the iPhone’s exclusive U.S. carrier since the device debuted in 2007, uses a different system.
 
Cell towers
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 two sides also had to agree to swap inside information about future products.

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