Verizon Wireless Said No to The iPhone

The second largest US wireless carrier, Verizon Wireless has apparently had the opportunity to be the exclusive distributor for the iPhone around two years ago.

After discussing it with Apple, it looks like Verizon didn't agree to Apple's claims including a percentage of the monthly cellphone fees, control over where and how the phones would be sold as well as the relationship with the users.

"We said no. We have nothing bad to say about the Apple iPhone. We just couldn't reach a deal that was mutually beneficial", said Jim Gerace, a Verizon Wireless vice president.

Following Verizon's rejection, Apple moved on to Cingular, which will be the exclusive US carrier for the iPhone that is expected to start shipping in June and become available at approximately $500.

The two companies have partnered before in the production of the Motorola ROKR with iTunes integration. According to Verizon, Steve Jobs, Apple CEO has insisted on having hard control over the iPhone's distribution.

This would have proved to be very inconvenient for Verizon due to the fact that Wal-Mart, Best Buy and other distributors working with wireless carrier might have been left out. Apple also wanted to have the final word on whether an iPhone should be replaced or repaired in the case of a faulty phone.

For the time being, Apple and Cingular (currently re-branding to AT&T) have declined to reveal any terms of their alliance, including how long the iPhone exclusivity will last, although rumor has it that it's a five-year contract.

While it's a sure thing that the iPhone will be available at Cingular and Apple stores and on their websites, no one has mentioned so far whether Cingular's distributors such as Wal-Mart and RadioShack will be getting the phone.