Partner bypasses Apple to sell iPad 3

Partner had previously refused Apple’s demands to commit to a minimum number of sales.

April 24, 2012 23:00
1 minute read.

APPLE’S NEWEST iPad 370. (photo credit: Shannon Stapleton/Reuters)

Orange franchisee Partner Communications Ltd. has signed an agreement with Apple Inc. franchisee iDigital Ltd. to directly sell iPad 3s, after Partner had previously refused Apple’s demands to commit to a minimum number of sales.

Cellcom Israel Ltd. has agreed to Apple’s demand and signed an agreement which gave it iPad 3 marketing exclusivity until Partner and Bezeq Israeli Telecommunication Co. Ltd. mobile unit Pelephone Communications Ltd. decided whether to accept Apple’s condition.

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Sources inform Globes that Apple had initially demanded a commitment to sell tens of thousands of iPad 3s over three years, with some sources estimating the figure at 100,000 units a year, but was unable to obtain permission for this.

The mobile carriers faced a dilemma, because the iPad is not like an iPhone, and committing to selling such a large number of units was liable to remain an unmet promise, given the presence in the market of tablets that are almost as good as the iPad 3, which was not the case when the iPhone was launched.

Apple’s contracts with mobile carriers are meticulous and explicit, and, in the past, Apple did not hesitate to intervene and suspend the marketing of a particular device if the mobile carrier failed to comply with its terms. Partner may have made a calculated risk that Apple may not like iDigital’s agreement with Partner, and order iDigital to cancel it.

Partner’s share price rose 3.3 percent by early afternoon on the TASE to NIS 28.30, after rising 2.5% on Nasdaq Monday to $7.26, giving a market cap of $1.1 billion.

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