Apple, Verizon Partnership Might Not Run Smoothly: 10 Reasons Why

 
 
By Don Reisinger  |  Posted 2010-10-07
 
 
 

Apple, Verizon Partnership Might Not Run Smoothly: 10 Reasons Why


Rumors about the relationship between Apple and Verizon continue to dominate headlines. Speculation abounds over when, not if, Apple will release its iPhone to Verizon customers. And when that happens, most expect a major increase in Apple sales, and perhaps a vast exodus of customers from AT&T to Verizon.

But leading up to that release, and after the companies finally launch the iPhone on Verizon's network, they won't like working with each other. Apple focuses too much of its time trying to get everything to go its way. Verizon would surely hate the thought of Apple gaining too much power in their relationship, the way the hardware maker did with AT&T.

Apple simply won't like working with Verizon. Here's why:

1. The Android effect

A few years ago, Apple would have had a much easier time getting what it wanted from Verizon. At that time, the company's smartphone was the top product on the market. No other devices were even coming close to matching it. But all that has changed. Now, Android OS is the top smartphone platform in the space. Verizon is heavily invested there. It doesn't need Apple as much as it once did, and it knows that all too well.

2. Apple's desire for power

As Apple's relationship with AT&T has proven, the company wants all the power in its partnerships. That's something that Verizon will simply not allow. The company has used its leverage against Google over the past year, and it has been able to keep Research In Motion a trusted, but not-too-powerful partner. Don't expect that to be any different with Apple.

3. The realization that Verizon might not need Apple

Android OS has proven to be extremely successful for Verizon. As a result, the company might not even need Apple. After all, Android OS continues to sell well, and most believe the operating system's sales will only grow going forward. If that happens, the impact Apple would have on Verizon's bottom line would diminish. Thus, its importance would decline with it.

4. Verizon wants a cut

AT&T was forced to take whatever Apple gave it when it first inked the deal with Steve Jobs. In the process, it probably gave up a significant money-making opportunity through all the many ways Apple is monetizing its smartphone. Verizon has the luxury of coming in later. It knows how Apple is turning its profit. Expect the carrier to demand a piece of the revenue Apple is receiving from its many efforts. Apple isn't going to like it.

Apple, Verizon Liable to Clash over Multiple Issues


 

5. The AT&T issue

AT&T is undoubtedly playing a key role in the negotiations between Apple and Verizon. Unlike AT&T, which got the iPhone without fear of competition, Verizon is the second company to carry the iPhone. With that comes the fear of Apple potentially working closer with AT&T, the company losing more subscribers to the competition, and other problems that could derail the Verizon iPhone. Simply put, AT&T is likely making Apple's negotiations more difficult than they would be otherwise.

6. Steve Jobs

Steve Jobs is an interesting character. The Apple CEO is undoubtedly a visionary, but he also views himself far more highly than others might. And he believes that his ideas are better than all others. Verizon is undoubtedly at odds with Jobs. And that battle of egos could be playing a key role in Apple's inability to bring the iPhone to Verizon store shelves sooner.

7. V-Cast

Verizon's V Cast service is integral to its mobile strategy. It's included in devices already available on its service. Whether or not it will play a role in the iPhone is anyone's guess. But recent reports claim the carrier is pushing it on Apple. For its part, Apple would probably want to keep V Cast out of its smartphone for obvious reasons. But will it? Inevitably, it depends on how badly Apple wants to bring its iPhone to Verizon's stores.

8. App regulations

Apple has received the brunt of the criticism surrounding App Store rejections. But in some cases, it was forced to reject certain applications because of rules put in place by AT&T. Verizon will undoubtedly have rules, as well. Whether or not those rules will work for Apple is unknown. But there will likely be some negotiation over what they should and should not allow.

9. It's new for Verizon

Part of the reason these two major companies might not work well together is that such a relationship is new for Verizon. The company is working with Google's Android platform, but the search giant's strategy is more traditional. Apple's is far more radical. It's a single company that wants to control every aspect of the mobile experience. That could be a problem for Verizon as it attempts to work with Apple and its quirks.

10. How will retail work?

Currently, the iPhone is on sale at several retail locations outside of AT&T stores and the Apple Store. Getting AT&T to come around on that wasn't necessarily easy for Apple. Recent reports claim Verizon has taken issue with it, as well, which means Apple will have to put out that fire. Such issues, regardless of how serious they are, will only make it harder for Apple to work with Verizon.


Rocket Fuel