Chapter 757: That’s Because I Don’t Understand

Steve Jobs coldly dismissed them.

I glanced back and forth between Chloe, who had turned pale, and Brian, whose face was beet red.

Verizon might not have cared, but AT&T had secured a monopoly supply contract with Apple for the iPhone, dramatically increasing its market share.

Of course, the monopoly contract expired after a few years, causing their share to drop, but that opportunity allowed them to push past Verizon and become a leader in the U.S. telecommunications industry.

The iPhone is too enticing a bait to walk away from this easily. I wonder what they’ll do.

“Are you really saying you won’t sign a contract with us?”

Brian from Verizon asked with a stiff expression.

“Do I look like someone who speaks nonsense?”

“You’ll regret it.”

“Regret? The word ‘regret’ isn’t in my vocabulary. And who are you to lecture me?”

Jobs scoffed. It was a typical arrogant response from Jobs.

“How long do you think Verizon will remain number one? If the iPhone is released and Apple doesn’t supply it to Verizon, what will happen in a few years? It’s clear as day to me.”

Brian trembled with rage at Jobs’ blatant taunt.

But Jobs didn’t stop, continuing to sneer.

“When that time comes, you who overturned this contract won’t be at Verizon. No, you won’t be able to stay there.”

“……”

Brian, biting his lip, didn’t answer.

But he stood up abruptly, as if he wouldn’t tolerate any more insults.

“Verizon will not be supplying the iPhone. Let’s see how well you do.”

The staff members from Verizon who had followed Brian all stood up as well.

Jobs looked up at the Verizon team silently with a smirk on his face.

Brian’s face contorted further at the sight of that smirk.

“……What are you going to do about Singlular?”

Brian asked Chloe, who was still seated.

She answered with a troubled expression.

“We will try to negotiate further.”

“Hahaha!”

Brian laughed loudly. But, he stopped as quickly as he began as he stared straight at Chloe and asked:

“You’re actually going to agree to this ridiculous contract?”

“We have to attempt negotiations.”

Brian pointed towards our side, specifically at Jobs, as he said.

“Do you think you can negotiate with that cold-blooded person?”

“Even so, we can’t just sit back and hand it over to T-Mobile. If that happens, we might be pushed out of second place.”

Chloe stated firmly.

Though the document Jobs presented was outrageous, it seemed AT&T, being the second-largest in the industry, had calculated that losing this contract would be a big loss.

“Ha! Let me give you some advice as a senior in the industry. If you accept that contract, all the profits will go to Apple, not Singular. And Singular will bear massive losses. In the end, it’ll cause significant damage to the parent company, AT&T.”

“……We’ll take care of our own business. We don’t need your advice.”

Chloe ignored Brian’s advice. Brian stared down at Chloe with a displeased look.

But Chloe did not avoid his gaze.

The first and second place companies were always destined to compete.

Of course, if they pulled out together, they wouldn’t be able to reduce the gap but would be able to maintain the status quo.

However, Jobs’ statement about bringing in T-Mobile kept her from backing down.

If T-Mobile partnered with Apple and became the exclusive supplier of the iPhone, their second place spot could be in danger.

“Do as you wish. We will take our leave.”

Brian, having glared at Chloe for a while, left the meeting room without even saying goodbye after that final remark.

Tim Cook followed Brian out. Probably to warn them once again to keep today’s events secret.

The chilly air in the office grew even colder.

Jobs remained silent with his arms crossed while Chloe was also quietly fiddling with the documents.

To break this uncomfortable silence, I spoke first.

“Is AT&T still planning to negotiate?”

Chloe trailed off as she replied to my question.

“We have to……”

Seeing Chloe watching Jobs’ expression, I asked again.

“Are you really saying that you’re going to accept these conditions? I’m a major shareholder of Apple, but frankly, this is an unprecedented contract.”

I tapped the document with the harsh conditions with my index finger.

“They’re asking you to offer an unlimited data plan, 200 SMS messages, and 450 minutes of voice calls?”

The pricing of the plan was to be decided by AT&T, but unlimited data had never been introduced to the market before.

An unlimited data plan was essentially poison to telecom companies.

It was structured to guarantee nothing but losses.

But I understood why Jobs had added these conditions.

The iPhone was a device that could not exist without data.

It was clear that the data usage would be incomparable to that of any other device.

If they were to be paid for the amount of data used, AT&T’s profits would be considerable, but they were being told to give that up.

“And on top of that, 10% of every iPhone user’s monthly phone bill has to go to Apple.”

They were also being forced to give a certain percentage of the monthly fee.

“When there are problems with the iPhone, Apple will decide on the replacements and repairs, not the telecom company, and Apple will also handle the repairs.”

This meant that iPhone customers were Apple customers, not telecom company customers.

“The only places where you can sell the iPhone are Apple Stores and AT&T Stores, and no other retailers are allowed to participate.”

In other words, retailers that had contracts with the telecommunications company couldn’t sell the iPhone, and only direct Apple and AT&T retailers were allowed to participate.

AT&T had contracts with retailers like Walmart and Best Buy.

But, if they were blocked from doing so, they would have to increase the number of AT&T stores.

This was a business that required a massive amount of capital.

“And what’s more, this contract only grants exclusive rights in the U.S.”

Apple was free to sell iPhones anywhere in the world except for the U.S.

But this contract was an exclusive contract that was only valid in the U.S.

There were so many other toxic clauses that it was hard to list them all.

I was simply curious why AT&T was trying to accept these conditions.

“What’s the reason for trying to sign this contract? As an investor, I would want to stop it.”

Even though I was a major shareholder of Apple, it didn’t mean I would agree with everything.

If I were a major shareholder of AT&T, it was a contract that I would definitely oppose.

Jobs glared at me with a surly look as if my words were absurd, but I didn’t stop talking.

“Chloe, is there such a desperate reason? There isn’t a big difference in market share between Verizon and AT&T, is there? I think it’s about 5% to 10% different. Then, if you just grow slowly, you’ll eventually win.”

Jobs spoke in a grumpy tone.

“Charlie, whose side are you on?”

“I’m obviously on Jobs’ side. But, I can’t understand this with my common sense.”

“The iPhone is a device that will change the times. Being able to sell the iPhone exclusively in the U.S. is enough to overtake Verizon. Knowing that, isn’t that why AT&T is staying here and not leaving?”

Even so, they shouldn’t go so far as to take on so much of a burden.

“I know that much. I’m asking if there’s another reason for finalizing this contract, even with a huge loss.”

“Hmm… Do you know that Verizon and AT&T have roots in the same family?”

“To some extent.”

AT&T was a telecommunications company with a history of over 100 years.

Its predecessor was the Bell Telephone Company founded by Alexander Graham Bell.

It was a monopoly with no competitors, and the U.S. wasn’t a country that would leave it alone.

They invoked the anti-monopoly law and ordered it to sell everything except the long-distance network and telecommunications equipment subsidiaries.

Because of this, AT&T had no choice but to divide the company by region and sell it off.

As the profitability of the long-distance telephone business decreased with the appearance of competitors, AT&T jumped into the rising computer business to survive.

But it also failed miserably, losing to IBM and Apple.

“They got beat up by anti-monopoly law and split up the company. After going around and around, they reacquired the companies that were split off, but the market had already been dominated by Verizon. The headquarters is AT&T, but they got pushed aside by Verizon. How insulting would that be?”

They used the anti-monopoly law to forcibly divide the company, but as time passed, only two telecommunications giants, Verizon and AT&T, remained through mergers and acquisitions.

“They split up a big dinosaur and in the end, two new dinosaurs were created. Well, when you’re doing business, there are times when pride comes before profits, right?”

Jobs’ kind explanation made it a bit easier to grasp the situation.

Jobs never intended to sign a contract with Verizon from the start.

He was just using them to move AT&T, and T-Mobile, the third-place company, was also being used for that purpose.

‘He sure is sharp in these kinds of things.’

I was impressed by the method he had chosen.

I knew how important this process was because I’d also made several investments for other reasons while accepting losses.

AT&T had a reason to beat Verizon, and they couldn’t miss this opportunity.

This was the reason why Chloe was smiling bitterly.

“As you said, we have to secure this contract to beat Verizon. And we’re currently discussing a merger with SBC for that reason. We have to secure this contract even for the sake of the merger.”

Chloe’s words made me realize the source of the discomfort I was feeling.

I knew something was off, but AT&T hadn’t merged yet.

Thanks to the iPhone being released earlier than in my previous life, there were some things that were slightly different from my memories.

“We’ll sign an exclusive contract for the iPhone and use that as a weapon to persuade shareholders. We’ll say that it’s because our coverage is lacking. The government won’t be able to stop it either.”

Chloe’s statement meant that they would merge with SBC to expand their coverage throughout the U.S.

For this, they needed this ridiculous contract.

I looked at Jobs who was still grumbling sourly next to me.

Was all of this Jobs’ idea? Or was it Tim Cook’s advice?

Whosever idea it was, this was a checkmate.

“But, we can’t accept everything. I think we have to take some of it out.”

Chloe, looking at the still sulking Jobs, said cautiously.

“Everything else is fine. But, asking for 10% of the monthly fee to go to Apple is too excessive.”

I also thought this was the biggest toxic clause.

Because it was a condition that the board of directors and shareholders would definitely oppose.

There was no company that would accept the demand to give up its profits.

“Instead, how about we greatly increase the subsidies for the iPhone on a two-year contract basis? The more iPhones are sold, the more Apple’s profits will increase.”

It was a proposal that was the same but different.

‘They can’t reduce the amount of the monthly fee, but they’ll increase the iPhone subsidies by that much.’

But they say that even the same words can sound different depending on how they are spoken.

The subsidy sector was an area that could be seen as an investment to expand the business.

“Hmm…”

Jobs stroked his chin while making a humming sound.

As he made a show of contemplating, Chloe continued to persuade him.

“We will do our best with the company’s capabilities to sell the iPhone. The more iPhones are sold, the more our telecom company’s customers will increase.”

That was the same as saying that Apple and AT&T’s fates were intertwined.

At that moment, Tim Cook opened the door and came back in. His face was etched with fatigue.

“Did you warn them well?”

Tim Cook nodded and sat back down.

“I’ve warned them enough, they won’t do the stupid thing of publicly revealing our demands to the media.”

No matter how angry Verizon was, they wouldn’t do that.

Jobs seemed to have the same thought as he shrugged and said.

“AT&T says they will negotiate with us.”

“Oh, really?”

Tim Cook scanned Chloe with eyes like a hunter sizing up his prey.

“You can negotiate with me. Let’s go and coordinate.”

Tim Cook stood up again from his seat.

“Let’s all go to my office.”

Tim Cook took all the staff members who came from AT&T out of the meeting room.

The door of the meeting room closed, and only Jobs and I remained.

“Jobs, you planned this from the start, didn’t you?”

Jobs just laughed instead of answering my question.

“T-Mobile was just a card to pressure AT&T as well.”

“T-Mobile isn’t a big enough company to join hands with us.”

“In the end, calling Verizon and T-Mobile, all of it was to pressure AT&T. Is this Jobs’ idea? Or….”

I trailed off, looking at the door where Tim Cook had left.

But Jobs was still just laughing.

“What does it matter? What matters is that AT&T can’t escape our grasp now. By the way, the reason I showed you these negotiations wasn’t because of that….”

I cut off Jobs’ playful words with an absurd tone.

“You’re going to ask me to sell iPhones in Korea, aren’t you?”