furthermore, revenue derived from purchase of music OTA (or through carrier store online) would seem to be eliminated because of synching with iTunes. will Cingular get a cut of iTunes sales for music going onto an iPhone? not likely. would someone choose to buy music from a Cingular store instead of iTunes? even less likely.

if the iPhone doesn’t require users to purchase other data products (backgrounds/wallpapers, ringtones) through the carrier’s store, insead allowing one to access for free on the web (or through a third party), this doesn’t do much for Cingular either.

not only that, they are, in effect, subsidizing for cingular, the development of code which allows a manufacturer a cut of subscriber revenue based on product. you can see why a carrier wouldn’t build this for themself and put it out — the manufacturers are more than happy to spend next to zero (in the US market at least) on advertising and receive the subsidies in exchange for a pissant exclusivity clause, and lawyerly business lunches are cheaper than development.

anyways, if this thing takes off, for Cingular at least, it will signify the beginning of the end of cell phone subsidies – the manufacturers will also have to start pushing their products themselves in conjunction with the carriers, and fighting for bigger percents of revenue based on device popularity.
the carriers will only cover the service costs.

so with all that being said, i have a hard time believing that verizon honestly passed on this -their MBAs aren’t that shortsighted.