Cingular Faces Uphill Battle In New York Market

Cingular’s unique partnership with Apple grants them exclusive rights to distribute the highly touted iPhone, but some industry experts are concerned that the device may fall short of expectations, particularly in New York City where other wireless carriers, like Verizon and T-Mobile, command the local market.The iPhone is slated to debut in June at $499 or $599. To get a hold of Apple’s latest and greatest innovation, consumers must also sign a two-year cellular phone contract with Cingular. The financial details of the partnership between Cingular and Apple are undisclosed, but it is expected to be a two-year, exclusive agreement for American markets. The success of their venture depends not only upon the success of the flashy, expensive gadget itself, but also upon Cingular’s ability to lure customers away from other carriers into a two-year commitment, experts say. Last week, Cingular salesmen were busy lining up corporate clients for new iPhone contracts that would begin in June.A technology analyst with Current Analysis, Avi Greengart, was cautious about the prospects of the partnership. Apple is limiting its pool of potential customers by limiting compatibility to one wireless carrier. “Keeping the iPhone as an exclusive should drive Cingular subscriptions, but it could dampen overall [iPhone] sales,” Mr. Greengart said in an interview.A technology analyst for the Yankee Group, Josh Martin, told the Sun that the product might not immediately make a major impact. “People should recognize that this is not necessarily a mass-market item, at least not the first-generation product,” Mr. Martin said. “Price will be a major inhibitor.”The executive director of Cingular’s Media and Industry Analysis Relations, Mark Siegel, described the reasoning behind the exclusive distribution between Cingular and Apple. “The benefits of partnership are many fold. As the discussion [with Apple] evolved, we came to see that the exclusive, multiyear partnership was best for both of our bottom lines,” Mr. Siegel said in an interview.Cingular’s exuberance over what Mr. Siegel describes as “a stunning … extraordinary device” is understandable, but their strategy for coaxing people into a 2-year wireless contract on a $599 phone is still uncertain, in part because of Apple’s marketing restrictions.At a Midtown Cingular store, manager Chris Smith described a great deal of uncertainty about how the iPhone will be marketed and sold in retail outlets. Despite these concerns, Mr. Smith said he was excited for the iPhone’s arrival. He said he “definitely plans on using one.”

Cingular Faces Uphill Battle In New York Market

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