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July 06, 2007

Comments

marco hunter

What's better, 50% of something, or 100% of nothing?

Apple Pie

Bad for Vodafone. They will watch and learn.

Reinking

Vodafone gets 100% of nothing. Some other company will get ___% of a lot. Which makes more sense?

Marc

Are you just figuring this out? Apple gets a cut of AT&T's monthly user subscription fees which is why they are accounting for phone sales over the life of each two year contract, not when the phone is sold. Verizon stood by their guns and wouldn't give Apple a slice. You have no idea if it will turn out to be "good" for either Vodafone or Verizon for "sticking to his guns".

kelly I.

THEY'VE GOT TO START SENDING THESE SO CALLED JOURNALISTS TO COMMON SENSE SCHOOL! WHAT'S THE MATTER BOYS AND GIRLS IN THE JOURNALISTIC HATER COMMUNITY YOU OBVIOUSLY NOT MAKING ENOUGH MONEY TO BE ABLE TO AFFORD THE IPHONE...STOP HATEN...

BBras

I think Vodafone should double their fees and stick to it no matter how low their customer base shrinks.
Good for them sticking to their guns and not wanting those low margin accounts all their competitors would have.
Wouldn't want to be seen as giving in, even if it means going out of business in a competitive market.

(Is this author really this stupid?)

carlk

Not only they will get 100% of nothing they will also get –100% of everything from their existing customers switched to the other network for the iphone.

Walt Haderthauer

No, not good for Vodafone.

We are talking about an 'Exclusive' phone carier agreement. That is restrictive to Apple and a Bonus to the Phone carier company. They are foolish not to strike an agreement which will bring them millions of customers that they don't already have. They will also avoid loosing those customers to the Company that does eventually partner with Apple. And those customers will not come back, that is if Vodafone is still in business then....

steve

Well, regardless of the outcome I would think it's a pretty bad move for Vodaphone. Even having a small piece of a massive product right from the launch certainly can't hurt their bottom line. It's a head butting of power players and Apple has the power.
Good luck Vodaphone. You'll be looking happilessly from the outside in.

Will

Imagine if Vodaphone and the other "principled" (lol) carriers just broke even. As long as they delivered quality service think of the "free" publicity they would receive piggybacking off of the iPhone buzz which is going (if not already) viral...

jcamp

"good for Vodafone CEO Arun Sarin for sticking to his guns"

You are kidding right? The iPhone sells somewhere between 300-700 K of units in less than a week. The major complaint left on the table is the network (controlled by AT&T)- but no major complaints (keyboard?) about the units themselves and this means it's "good" for Vodaphone not to take a piece of the action?

At least Verizon could say it was dealing with a vapor unit and wasn't going to take the chance. Vodaphone doesn't have this excuse. Think of the publicity it would get if the last major drawback (the network) was removed from the equation.

spaceage

"So not only does Apple (AAPL) keep all the revenues from the $500 iPhones..."

Why would you conclude this is the case? Apple offers standard reseller margin on this product just as it would any other product it sells through retailers. You don't think guys like BestBey et al who will eventually sell the product will do it for no margin, do you? Engage brain before writing this crap, please.

Ken

It takes huevos to turn down future growth in revenues. They will watch as the party ship sets sail in another direction.

Will

Walt Haderthauer is basically right, it's major players head-butting. However, most of you guys are way oversimplifying business negotiations. Without seeing the offers, there is no way to know whether it was a good deal for the company or not. It's not hard to imagine fee cases where Vodaphone could cost itself more than it could make (or risk losing) by making a deal with the devil.

The first week sales are impressive, but obviously mean nothing about ongoing sales. It's just a measure of the hype.

How large is the market for a $600 phone? Only the future will tell, but my most Apple-ish friends think it's pretty pricey, and they are relatively high income earners.

FutureUser

Remember, not only would a phone company have to give up a percentage of new income of the *marginal* customers being added; they would also have to give up a percentage of the old income from their *original* customers who switched to iPhony. So your equations are incomplete. The actual equation should be: 50% of (some new customers) minus 50% of (lots of old customers changing phones)
VERSUS
50% of (nothing) minus 100% of (some old customers leaving)

It's not so clear cut any more, is it??? Please engage brain in wide-view mode before oversimplifying the model.....

FutureUser

Remember, not only would a phone company have to give up a percentage of new income of the *marginal* customers being added; they would also have to give up a percentage of the old income from their *original* customers who switched to iPhony. So your equations are incomplete. The actual equation should be: 50% of (some new customers) minus 50% of (lots of old customers changing phones)
VERSUS
50% of (nothing) minus 100% of (some old customers leaving)

It's not so clear cut any more, is it??? Please engage brain in wide-view mode before oversimplifying the model.....

Tom

Good for Apple. Cell phone providers are almost like the mafia anyhow with their criminal contracts and rates that rape your bank account.

Don Riccardo

I am stunned by the number of journalists who aren't.
Sticking to ones guns is a moral, not business decision. If they morally object to Steve Jobs offer, OK. But I will guarantee you it was a business decission. And there were negotiations going on. To get a better deal, you have to have something to offer. Providers need to understand the new paradigm. They are "Service Providers." Nothing more, nothing less.
I promiss you that Verizon already does, and Vodafone will wish they had stayed a little longer at the dance. And I am just a certain that LG, Motorola, etc. love Steve Jobs. He has just broken their chains.
If Apple did just sell 700,000 iPhones and 40% came to AT&T from other providers, loosing 280,000 subscribers sucks.
Ther is an old saying: Lead, follow, or get off the road.
AT&T decided to 'Shut up, sit-down, and hold tight.'

aatm

why do people automatically assume that because people don't like the iPhone, that they don't make enough money to buy one? will all you kids and fanboys grow up a bit?

you all make apple and the iphone to be the best thing since the wheel or moveable type.

it's not. innovative interface? yes. but it's not as good as apple or you all claim it is.

Partridge

I have an iPhone. Vodafone made a mistake

beavis.. i mean.. butthead

Can't we just get abong! he heheheheh

Donovan

This is not good for Vodafone. Consider this:

1. Essentially, the revenue sharing deal would give Vodafone access to phone hardware AND software. The alternative is Vodafone has to spend its own pounds to develop either an internal software firm OR secure an external software development firm.

2. Excludes Vodafone from the cell phone market that bundles hardware design with software.

3. Indirectly raises Vodafone's risk appetite by seeking another solution to competete in an intensified marketplace where partnerships are essential.

4. Time delay to bring a product in demand to its current subscribers - therefore churn increases robustly.

Steven J. Weinberg

"good for Vodafone CEO Arun Sarin for sticking to his guns."


A bit jealous of Apple these days, are you? Why not give in to temptation and become an Apple afficionado? It's mostly been so much fun for me these past 20 years

Peter

Good for Vodafone CEO for sticking to his guns? Are you kidding?

Check out the Vodafone.co.uk web site. They give you a free phone with a monthly plan. You don't think the manufacturers are giving away free phone, do you? All Apple is asking is this subsidy to be given to Apple in monthly installments. Besides, Apple is covering much of tech support, unlike other manufacturers. I say good for Apple CEO for sticking to his guns.
As for Vodafone, they can look forward to losing their guns along with their market share.

David

Never spent any extra money on a telephone since I always used free phone with service. Wife bought the new Iphone and I will swith to it as well when my Verizon contract is due again. Have been using her phone to view the web and financial information and it is great. Definitely better when in a WIFI spot versus the ATT network but both work much better than current internet option from Verizon

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