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“Verizon Wireless, the No. 2 U.S. cellphone carrier, passed on the chance to be the exclusive distributor of the iPhone almost two years ago, balking at Apple’s rich financial terms and other demands.

Among other things, Apple wanted a percentage of the monthly cellphone fees, say over how and where iPhones could be sold and control of the relationship with iPhone customers, said Jim Gerace, a Verizon Wireless vice president. "We said no. We have nothing bad to say about the Apple iPhone. We just couldn’t reach a deal that was mutually beneficial.""

Down the road this may turn out as a really bad decision for Verizon. If the iPhone reaches the hype in sales as it has on the internet since Job’s announcement at MacWorld, the edge gained by Cingular will be very significant.

According to the USA today, customer care was another hitch: If an iPhone went haywire, Apple wanted sole discretion over whether to replace or repair the phone.

This is for me in line with what Jobs said about the iPhone. It’s not a cellular phone with music but an iPod with a cellular phone. This fundamental definition of the iPhone can explain why Apple wants to play a key role in the iPhone customer support.

But this may also be part of Apple’s learning curve of the cellular market. They will probably learn that the relationship between the carrier and the customer is a very tight relationship and they won’t be able to keep the same distance as they have with their iPod customers.

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