According to a new CNBC report, Apple basically forced cable firms Charter and Comcast to sell a bigger variety of other Apple products in return for the right to sell iPhones.
Both companies offer wireless services that form part of an MVNO deal with Verizon. Charter sells Spectrum Mobile, which has around 300,000 subscribers, and Comcast sells Xfinity Mobile with nearly 1.5 million subscribers.
The two firms wanted to start offering iPhones to put them in a better position to compete with the four big US carriers: Verizon, Sprint, T-Mobile and AT&T. Before it would allow them to sell iPhones though, Apple required them to also sell some of its other products.
With the iPhone being hugely popular in the US, it was nearly impossible for Spectrum Mobile and Xfinity Mobile to compete without being able to offer iPhones to its clients. Apple knew this – and used it during the negotiations.
Details of the two agreements remain sketchy, but Apple requires Comcast to sell what CNBC describes as “in the thousands” of iPads at a reduced cost – and carry the difference between the normal retail price and the discounted price. In the case of the sixth-generation iPad, this amounts to nearly $37 per device. The firm also has to sell cellular versions of the 7.9-inch iPad mini, the 10.5-inch iPad Air and the 10.5-inch iPad Pro at a similar discount, and carry the cost.
In Charter’s case, it is selling Apple TVs at $7.50 a month for 24 months (i.e. $180) – but only after two years. Because of this agreement, it has become the biggest third-party seller of Apple TVs.
The argument being used is that Apple Watches and iPads “enhance the value” of Spectrum Mobile’s wireless service, and that Apple TV delivers an enhanced “navigation interface” for Charter clients.