Apple’s affair with Telecom Italia ends marriage

Remember those hints Apple COO Tim Cook and CFO Peter Oppenheimer dropped about the company not being “married” to exclusive carrier deals? Here’s what Cook said back in February at the Goldman Sachs Technology Investment Symposium.

We went into Europe and we picked the top carrier in each of those three countries…Now, are we married to this model? Will we do that everywhere? We’re not married to any business model. What we’re married to is shipping the best phone in the world […] You might find [a country] where being exclusive might not be in our best interests…we’re going to intelligently think about each one and decide what’s best for the company to do.

Indeed, it seems that Apple’s succumbed to the Mediterranean charms of Italy, entering into an bigamous relationship with both Vodafone, as noted earlier this morning, and mobile provider Telecom Italia.

That’s not stopping silly analysts from reading into this development. One went so far as to tell the London Times that this was a sign of Apple “capitulating.” Pshaw, says I. As Cook and Oppenheimer have said, I think this is just a matter of picking the right distribution method for the country in question. The same analyst suggests that Apple’s existing partners may take umbrage:

Apple now faces the prospect that operators in other countries may revolt against its onerous terms, which are understood to involve the network sharing 10 per cent of revenues in return for the right distribute the iPhone exclusively for a two-year period.

Yeah, if it’s a choice between kicking back a percentage to Apple vs. losing exclusive rights to distribute the iPhone, I’ve got a bet on which side they’re likely to come down on. Sure, sales in Europe haven’t been as big as in the US, but exclusivity is still a big market advantage for those that have it. However, as Apple expands, I would expect to see more non-exclusive deals like this in the future.

Category: News

Posted by Dan Moren on May 6 2008, 11:45 AM ET

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