“Doing business with Apple is like going on methadone, because you’re giving so much money or share of your revenues, you’re paying high prices for phones and they tell you how you’re going to market the phones and what prices you can charge consumers for data and even for calls so from my point of view, I don’t see any sense for Digicel to do business with Apple.”

These caustic comments were made by Denis O’Brien, Chairman of Digicel Group Ltd. on September 25 during an interview with Erik Schatzker and Stephanie Ruhle on Bloomberg Television’s “Market Makers.” Methadone is a synthetic narcotic drug similar in its painkilling effect to morphine. It is also used as a substitute for heroin in the treatment of addiction.

O’Brien did however preface those comments by admitting that he thought that the iPhone 5 “is a terrific phone.” The Irishman added that he thought that Apple’s marketing and products were ‘brilliant’, but that “at the end of the day its bad news if you’re an operator and the operators around the world have been mugged basically, pinned to getting all their consumers onto iPhone and then every 18 months having to subsidize new handsets” – calling the preposition ‘ridiculous’ for network operators such as his.

On September 24, Apple announced that the iPhone 5 topped its previous first weekend sales record of 4 million units set by the iPhone 4S last year. In just three days, Apple moved over 5 million units, the company said, despite some early preorders being delayed until October.

“Demand for iPhone 5 has been incredible and we are working hard to get an iPhone 5 into the hands of every customer who wants one as quickly as possible,” Apple CEO Tim Cook said in a statement. “While we have sold out of our initial supply, stores continue to receive iPhone 5 shipments regularly and customers can continue to order online and receive an estimated delivery date.”

Apple CEO Tim Cook

The iPhone 5 launched on September 21 in the US, Australia, Canada, France, Germany, Hong Kong, Japan, Singapore and the UK. The device was available to preorder beginning at midnight on September 14, and stock set aside for US preorders sold out in approximately one hour. Apple previously announced that customers had preordered over 2 million iPhone 5s within 24 hours.

O’Brien also threw his weight behind Google’s Android, saying “Android has some super products coming. Samsung has an equally good product,” making reference to the Samsung Galaxy S3 one can assume, the phone many consider the main competitor to the Apple’s iPhone 5S in the super high-end mobile phone bracket.

“All you’re doing is killing your margins because if you look at US operators, they have all lost 300 basis points at a minimum because they have introduced the iPhone”.

Blackberry he said, “are in this kind of dead zone where they have a fantastic operating system” but suggest that they need a parallel one  as is Android. He also suggested that Windows needed to spend more money in investment to make it more pervasive. “Why are we going to do business with Apple when we’re going to give all our money away?” O’Brien continued.

He also stated that the popularity of the iPhone also made it unlikely for network carriers Verizon and AT&T to speak out about the relationship between Apple and carriers because they were “too afraid” of the backlash from consumers who love and use these products as they hit the market. “It’s killing margins and that’s stopping investment in data and building bigger data networks and faster networks which are ultimately going to be where the world is shifting to.”

He stopped short of calling Apple ‘evil’ when asked, instead calling them ‘smart’ in ‘conning’ carriers in dictating the terms of their relationships, pointing to the fact carriers are not even allowed to offer discounts on the handsets.

Of course if this is true, there may indeed be little value in Digicel making a play in the iPhone market. After all, Digicel makes quite a bit from the sale of Blackberry phones and from their Blackberry data plans. O’Brien is also well aware that as tech savvy as phone users in the Caribbean and Latin America have become, they are less rabid and are still not likely to join long lines for hours to become the first owners of brand new shiny expensive handsets, as is the norm in the US, and parts of Europe and Asia. This is even less likely given the fact that these phones are not as heavily subsidized as they are in other parts of the world.  Digicel Group Limited- comprises 30 markets in the Caribbean, El Salvador and the Pacific.

Managing director of LIME Jamaica Gary Sinclair

The position by Digicel, if a legitimate one, is even more curious as to how is it that the mobile powerhouse and undisputed market share leader Digicel finds it unfeasible to carry one of the most popular phones in the world, while its struggling and ailing competitor LIME can. While LIME has not yet offered the iPhone 5S, it offers its predecessor, the 4S for between JA$42,299 for the 16G version and JA$64,399 for the 64GB version. These are in addition to monthly rates of between $3,268 and $7,499 depending on the selected plan.

Maybe the answer to the previous question is that while one is more cognizant of business realities (Digicel), the other may be making a last ditch effort to woo high end users and tech junkies who have grown disenchanted by the phones like the Blackberry as is the case in other developed regions.

Shrewd and well-reasoned business decisions such as this may also be just one of the explanations as to why LIME is perpetually in the red while mobile juggernaut Digicel reported that its revenues increased by 16 per cent year on year to US$1.24 billion for the six months ended September 30, 2011. BM