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Cingular Sees iPhone as Path to Growth

Tue, 02/27/2007 - 3:20pm
Susan Rush

As the exclusive U.S. partner for the newly introduced iPhone, Cingular Wireless believes adding the multimedia phone to its portfolio will help draw in new subscribers and boost revenue.

The companies, which bring different corporate cultures to the table, began working on a partnership 2 years ago, according to Glenn Lurie, president of national distribution for Cingular.

The iPhone is being built by Apple and delivered to Cingular customers. This is not an MVNO arrangement, stresses Lurie, speaking to rumors that have been swirling for months that Apple would opt to go it alone and take the MVNO route.

The multimedia handset is a phone, a widescreen iPod with touch controls and an Internet communications device, as described by Apple and Cingular. The iPhone was built on Mac's OS X. "The decision to design the iPhone with a smartphone orientation was a very wise, yet unexpected, move that puts Apple squarely against Microsoft and the Nokia N-series," said M:Metrics as part of its analysis of the product introduction.  M:Metrics estimates that of the 6.15 million smartphone owners in the United States, 2 million of them have a Windows Mobile device.

Smartphone users are known for their increased consumption of data and multimedia content. Lurie asserts that the iPhone represents a revenue-growing opportunity and expects to see higher data use with these handset owners. The device also presents Cingular with a chance to grow its business, especially given the number of iPod lovers that exist. "This announcement will push the innovation for everyone," says Lurie, who notes Jobs called the iPhone the best iPod ever built.

As part of their strategic partnership, Cingular and Apple worked together to create Visual Voicemail, which will debut on the iPhone. Visual Voicemail enables users to view a list of all of their voice mails and then pick which messages to listen to, without having to cycle through all other messages. 

The iPhone is expected to be just the beginning for the Apple/Cingular relationship, according to Lurie. Although no details are available at this time, future innovations are expected from the duo, he says.

The iPhone will hit the market in June in the United States. Cingular will offer the 4GB model for $499 and the 8GB model for $599. Cingular plans to offer the device through its Cingular stores and online. Apple will pitch in at retail by selling the iPhone at its Apple-branded stores and online as well.

Apple is planning a European debut for the iPhone later this year and an Asian launch in 2008.

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