U.S. Cellular turned down the Apple iPhone because the terms were "unacceptable"

U.S. Cellular turned down the Apple iPhone because the terms were
Regional carrier U.S. Cellular reported its third quarter earnings on Friday and during the earnings call, CEO Mary Dillon said that the mobile operator was offered the chance to carry the Apple iPhone 4S, but turned it down. The reason for turning down the chance to sell the iconic smartphone had nothing to do with the carrier's network and the potential for iPhone users to clog up the pipeline. Instead, Dillon said that Apple's terms for offering the device were "unacceptable from a risk and profitability standpoint". This is not the end of the matter as the CEO said that U.S. Cellular would be open to selling the Apple iPhone in the future.

Apple has been known to demand onerous terms from carriers in return for offering the iPhone. Questions of whose customers iPhone users were have been an issue dating back to the first Apple iPhone and were allegedly the reason why Verizon turned down the chance to be the exclusive carrier for the phone back in 2007. Sprint joined Verizon and AT&T in launching the Apple iPhone 4S in the States last month and says it is paying 40% more to obtain an iPhone customer than a user of another model. The nation's third largest carrier says its deal with Apple will last 4 years and that it won't turn a profit on the deal until 2014. On the other hand,  Sprint needed to offer the Apple iPhone as it was losing customers to AT&T and Verizon, both of which offer the handset. Besides Sprint, Verizon and AT&T, regional carrier C Spire also offers the Apple iPhone after reaching an agreement with Apple a few weeks ago.

As for the Q3 earnings, U.S. Cellular said that the percentage of its customers using smartphones rose to 39.9% from 23.6%, helping operating earnings rise 66% year-over-year to $101.6 million. That works out to 73 cents per share in earnings this year vs. 44 cents last year. Revenue rose 5% to $1.03 billion. Still, the company lost 34,000 customers on contract and gained 11,000 lower-margin pre-paid customers for a net loss of 23,000 users.

source: electronista

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109 Comments

1. Scuba_Steve

Posts: 79; Member since: Oct 16, 2011

I'd like to see the cost of selling the iPhone. No prfit untl 2014? Surely they must be making something right?

28. BuckeyeCadet86

Posts: 78; Member since: Oct 26, 2011

Actually no there is no profit on the iPhone until well into 14-16 months. Apple charges the carriers so much for the phone and then demands they sell it at a subsidized price 400 off.

95. stilt

Posts: 63; Member since: Jul 13, 2008

Yeah I work for verizon a sales rep .I cant stand selling an iphone. cause With a blackberry, droid or palm or windows device I sell it and get commissions ranging from if its a primary line $25 or higher in commission if its a secondary line $22 or higher. with a damn iphone a primary line gets only $20 in commission and you cant make any feature commissions cause apple doesnt pay on features and if its a secondary line only damn $5 cut and dry. sometimes you are tempted to talk a customer out of a iphone to get something else to make more money off of it, its ridiculous cause us as salesmen spend so much time explaining phones and selling phones and baby walking customers to only get that low ass commission for selling an iphone when all the other smartphones get way higher pay out for selling them. and get this if a customer already has an iphone then comes to upgrade to another iphone we make absolutely nothing at all cause they already paid commision on an iphone before so its like a complete waste of my time to even want to upgrade a person to a iphone its like a lost compared to what i can get for any other smartphone. I HATE APPLE AS A COMPANY GOOD PRODUCT BUT HATE WHAT THEY PAY OUT FOR COMMISSION TO SALESMEN

2. ZEUS.the.thunder.god unregistered

iconic ???? PA gimme a break.. its a mid range over rated device with hell lot of issues and a tiny display

3. iwebdroidberry7

Posts: 230; Member since: Jan 17, 2011

Android devices are flawless. (Heavy sarcasm.)

9. RORYREVOLUTION

Posts: 3131; Member since: Jan 12, 2010

You still mad that Android is a better OS than IOS, Blackberry, WebOS, and WM7 all put together?

57. Mozarrt

Posts: 301; Member since: Oct 08, 2011

Your comment makes me laugh, I guess it all just went to your head.

90. bobfreking55

Posts: 866; Member since: Jul 15, 2011

Dude. He's Right. It's mid range. It's just at par with everyone else with just a higher price. GET OVER IT. EVERYTHING HAS BUGS.

6. handsomehwang

Posts: 6; Member since: Jul 05, 2011

guys nothing ever goes wrong with android /sarcasm

7. Scuba_Steve

Posts: 79; Member since: Oct 16, 2011

It's people like you who give us(fandroids) a bad name. I'm not surprised you've been moderated before.

4. ZEUS.the.thunder.god unregistered

go n cry to ur mama..lol

5. cnwwyo

Posts: 126; Member since: May 26, 2011

all i can do is laugh! and good point zeus

16. ZEUS.the.thunder.god unregistered

ma pleasue:)

8. bbblader

Posts: 590; Member since: Oct 24, 2011

lol 2 companies have rejected the Ape ijoke 4Stupid and to think how everything speeds up in 2 years 50% of the stores wont sell ijoke

10. gallitoking

Posts: 4721; Member since: May 17, 2011

fine that they rejected the Apple.. in two years US cellular will beg to get the iphone or face extinction....

11. iamcc

Posts: 1319; Member since: Oct 07, 2011

Haha that gave me a good laugh, thanks gallito.

13. gallitoking

Posts: 4721; Member since: May 17, 2011

ex.. Sprint... gave in as they saw people feeling to other carriers all due to the iphone... google it...

99. bolaG

Posts: 468; Member since: Aug 15, 2011

I work for U.S. Cellular we're here to stay. I'm glad they didn't give in to the Nazis Iphone.

15. Sniggly

Posts: 7305; Member since: Dec 05, 2009

Don't think so. It's obvious that the deal would not be profitable to them at all. They're a good US carrier with extremely high customer satisfaction.

18. gallitoking

Posts: 4721; Member since: May 17, 2011

get 20 people off the street and tell me how many of them have us cellular.. ok...and then came back to me...

52. Sniggly

Posts: 7305; Member since: Dec 05, 2009

In the midwest, you'll actually find a significant amount of people who have US cell. Obviously they're not nearly the majority, and St. Louis is AT&T's backyard, but they are pretty big for a regional carrier which up until now didn't have any compelling Android phones. Hell, my two friends only dropped them eventually because when we did comparison shopping the smartphone issue popped up and AT&T was the only carrier that offered acceptable coverage at their lake cabin.

63. gallitoking

Posts: 4721; Member since: May 17, 2011

we are in the major leagues.. where only 4 carriers rule.... sorry I dont watch the minor leagues... Sniggly.. good for you supporting those little engines that could.....

72. Whateverman

Posts: 3295; Member since: May 17, 2009

US Cellular is big in Illinois. The biggest mistake you can make about them is that they are just another regional carrier. That's they are tied for number one with VZW in this area. If you were to poll 20 people in Chicago, 4 or 5 people would probably have a US Cellular phone. They're no Cricket.

78. dago

Posts: 6; Member since: Apr 12, 2010

Illegal aliens dont have a social to get VZW, thats why 5 out 20 have US Cellular.

82. Sniggly

Posts: 7305; Member since: Dec 05, 2009

News flash: to be on a billed carrier you need to be able to pass a credit check. To pass a credit check you need a social security number. To get a social security number you need US citizenship. Illegal aliens can't be on a postpaid plan with US Cell as a result.

100. bolaG

Posts: 468; Member since: Aug 15, 2011

They can in store with $150 dep with a Matricual Consular

104. taco50

Posts: 5506; Member since: Oct 08, 2009

you dont' have to be a citizen to have a social

83. Whateverman

Posts: 3295; Member since: May 17, 2009

Yeah, I can see how you would think that, with Chicago, Illinois being so close to the border and all! Dago, you know that wasn't right. Com'on man, be better than that.

88. Scuba_Steve

Posts: 79; Member since: Oct 16, 2011

Just to make a point, hispanics aren't the only ones who are illegal. There are much more illegals coming from up top than from the bottom. They just get away with it easier.

89. Whateverman

Posts: 3295; Member since: May 17, 2009

Excellent point, but I never specified which border. Either way, I'm glad you said that because some people act as though the term "illegal immigrants" is reserved exclusively to our neighbors to the south. But we know that's not true!

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