ASPEN, Colo.--It appears that Verizon Communications (NYSE:VZ) COO Lowell McAdam may have changed his tune about why Verizon Wireless did not sell the original Apple (NASDAQ:AAPL) iPhone when it launched in 2007.
At Fortune's Brainstorm Tech conference Wednesday, Fortune Editor Stephanie Mehta asked McAdam if it was a mistake that Verizon passed on the iPhone back in 2007. Interestingly, McAdams responded by saying that Verizon didn't really pass on the iPhone. Instead he implied that Apple CEO Steve Jobs wanted to make a phone that sold large volumes. "Steve Jobs is not a stupid person. He will go where the volume is, and the volume was in GSM," he said. "This wasn't about us passing on it. He made strategic decision. Now he made the CDMA version, saw the results and realized that is not bad decision."
This response is different from what McAdam said in October 2007, shortly after Apple introduced the first iPhone on AT&T Mobility's (NYSE:T) network. At that time McAdam was CEO of Verizon Wireless.
In an interview with FierceWireless, McAdam was asked if he regretted passing on the iPhone. His response: "None whatsoever." And when asked why, McAdam responded by saying that the company evaluates every product by looking at the customer experience, the technology and the financial model.
"From a customer perspective we didn't like the restricted distribution. We didn't like the fact that we were being asked not to service customers. Let's just assume the model you see from AT&T is what they asked us to do, so I'm not divulging anything," he said. "We have a huge network of stores and we put a lot of investment into training our people. The model was to say to a customer 'thanks for coming in, now go down the street to Apple and they'll take care of you.' We didn't like the customer model."
He further elaborated by saying that Verizon also didn't like the financial terms that Apple put forth. "The financial model, if you assume the financials that the European countries have said publicly what theirs was, we've made a $40 billion investment in our network in the last eight years," he said. "I don't think that revenue split was commensurate with the investment we made in the network. We are very happy with that decision."
Verizon declined to comment on this article.
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