Jobs played hardball on iPhone? No, he just marketed it properly

Today's Wall Street Journal has a front page article titled, "How Steve Jobs Played Hardball In iPhone Birth". But the article didn't live up to its title, as illustrated by this quote:

Mr. Jobs played hardball. He pointed to statistics showing that carriers' traditional voice revenues were declining. But he also made a compelling argument: He said that Apple could help Cingular capitalize on the Internet, people familiar with the discussions say.

Early on, both sides determined it would be a bad idea for Apple to offer its own cellphone service, leasing access to Cingular's network. Even though Virgin Mobile USA and other startup cellphone operators were using that method with some success, Mr. Jobs was cautious. He viewed the cellphone business as an unforgiving one, where carriers are blamed for network problems and overwhelmed by customer complaints.

If this description is accurate, Jobs simply marketed his product, with no evidence of hardball. After all, we here at Blackfriars say that a proper marketing pitch includes:

1. A problem statement from the listener's point of view. Jobs' argument of declining voice revenues was a classic example of this.


2. A solution description emphasizing benefits for the listener, not features. Cingular wanted to know what it was getting out of the deal; Jobs told them that he could help them capitalize on the Internet.


3. Strong differentiation and validation of the solution. Cingular needed to know how Apple's proposal would differentiate it from other carriers and provide value that others couldn't achieve. By rejecting an MVNO approach, Jobs started differentiating his ideal deal from other possibilities, Further, Apple's iPod business successes and its discussions with other carriers provided implicit third-party validation of its solution.


Having the elements of a good marketing strategy was just a component of the sale, to be sure. But as simple as these ideas are, Jobs took the trouble to use them and used them properly. These techniques were influential in getting a deal done with a major carrier, and telcos are notorious for being tough to deal with.

Bill Gates is famous for his exclusive and secret deals with PC makers to promote Windows to the exclusion of all other operating systems, going so far as to demand payment for every PC shipped, regardless of whether it had Windows installed or not. Steve Jobs' negotiations with Cingular sound like they were significantly more cordial and balanced than those deals. Jobs' marketed the iPhone to Cingular like the smart businessman he is. But hardball? Hardly.




Technorati Tags: Apple, Cingular, iPhone, Marketing, Hardball