A Starbucks spokeswoman says: "T-Mobile, AT&T and Starbucks have entered into a memorandum of understanding to resolve their disputes and are committed to providing a high quality Wi-Fi experience for customers." The resolution comes less than a week after T-Mobile filed a 13-page lawsuit accusing Starbucks of breaching a contract by allowing AT&T to provide customers with free Wi-Fi access while using T-Mobile's equipment. (Read the Dow Jones story)
June 11, 2008
Had to see that coming. There's no way they wanted to see a court room on that...
Posted by: pat nerr | June 11, 2008 at 10:17 AM
There was so much press about this story, and now it ends so quickly like this. Did T-Mobile just want to raise a stink because they were mad about the switch?
Posted by: Jon SBUX FORUM | June 11, 2008 at 01:35 PM
Does anyone know the particulars of this agreement? I would be curious to find out.
Posted by: Nobody | June 11, 2008 at 01:54 PM
With the Sonics trial starting next week, I don't think they wanted to have this hanging over them also.
If you are in an indefensible position, you typically look to make it go away.
Most likely sbux paid a chunk of money to buy themselves out of any obligation, and possibly paid for the equipment.
Posted by: truth | June 11, 2008 at 02:20 PM
If T-Mobile so instantly changed their minds about going to court, there is reason to believe that it wasn't a dropkick win for them...
In order to get out of any contract, there are usually buyout fees, so I wouldn't be surprised if sbux paid a chunck of change to get out of the contract. Makes perfect sense to me.
Posted by: P.R.I.D.E. | June 11, 2008 at 02:36 PM
They stated in the document that they didn't know until 12 days ago... which would have been closed case in the trial, everybody and their mother knew they were going to offer free wi-fi.
Posted by: Jj | June 11, 2008 at 03:22 PM
Truth, Starbucks is not a party to next week's Sonics trial. See C07-1620 MJP, City of Seattle v. Professional Basketball Club LLC, an Oklahoma Limited Liability Company. Howard Schultz is not even on the witness list for that trial, per news reporting by Seattle Times.
Seems much more likely that one of the parties in the t-mobile (I have no idea which one) thought they had a weak case and quickly realized that an out of court settlement would be advantageous to all parties. Wasn't worth the cost of litigation.
I'm sure there are issues in the current City of Seattle v. Oklahoma LLC that Starbucks and/or Howard Schultz find interesting and worth following, but I don't think that really is correlated to the result in this particular case.
Just my two-cents.
Posted by: Melody | June 11, 2008 at 03:52 PM
There is no single person/entity/etc who has more on the line in the City v Sonics case than Howard Schultz.
If the Sonics win, his case v the Sonics goes front-and-center. And his name gets thrown around nationally (its NBA playoff time) as the chief culprit.
Posted by: truth | June 11, 2008 at 05:02 PM
seems like sbux has something to hide. or maybe it was tmobile... who knows.
frankly, all i care about is some free wifi, which is surely an expected thing now in a coffeeshop. i mean, go to just about any shop worth its weight in beans and you'll get a cup of coffee plus free internet.
sbux has been waaaay behind the curve on this one. i can't even say i'm very happy that there are strings attached.
oh, well. sbux seems to be catching up in a race it originally started. there are superior companies that have surpass and will continue to surpass sbux unless someone with impeccable business sense gets at the helm.
unfortunately, that's not howard. he's living in yesteryear and can't figure out how to guide this company into its future. don't expect to see profits anytime soon. he's running the thing like it's still a cash cow... i mean why buy up smaller companies, install new machines, invest in things that don't return profit? also, why not pay your folks more, decide that they are the front line and invest in them? i understand the happier your employees are, the happier your customers will be.
sell on sbux.
Posted by: sbux_watcher | June 11, 2008 at 07:47 PM
Of course Howard is behind, he is behind on much of what the customers want. They don't want books, dvds, or bears, they want their coffee, they want it fast, and they want to go on. People who do stay in the store want to do business, not be pestered by the whole "experience" thing.
This is good news for Starbucks, because they don't have to go through the trial. Now though, the obligation for free internet is on them whether or not this result gives it or not. The customer is very picky when it comes to this thing, and if you don't do it right, McDonalds is right across the street ready for business.
Posted by: David | June 11, 2008 at 10:00 PM
The Wi-Fi service, T-Mobile relationship, AT&T relationship and Apple relationship had all been managed (poorly) by the Entertainment group until recently. Thank god Ken Lombard is no longer there. Too bad the damage has been done, Howard and Jim D. ignored all the red flags for too long. Good partners ended up losing their jobs because HS/JD didn't do something sooner. And the way Sbux handled the entertainment group layoffs was incredibly disappointing. Sbux doesn't really "care" about its partners and their families. Everything Howard and the senior leaders say is just propaganda.
Posted by: nthlatte | June 11, 2008 at 10:39 PM
Davaid,
You say that people want their coffee and they want it fast, no third place, right? Well maybe it's those same customers who have ruined what it used to be for those who still want that third place. Slow down and enjoy some of your life , you never know how much you have left.
Posted by: Darleen | June 12, 2008 at 05:43 AM
darleen,
you say that people want their coffee and they want it slow, a third place, right? well may it's those same customers (and partners) who have ruined what sbux is becoming for those who want want nothing to do with a "third place." speed it up and let others enjoy their life outside of the four walls you call sbux. these people are aware of how much time they have left and don't care to spend it in a sbux store.
Posted by: sbux_watcher | June 12, 2008 at 07:36 AM
sbux watcher,
and that's why we have a 3 minute rule, and drive thru's too please those customers who just want in and out. However, if some want the third place we are going to continue to offer it. I'm sure you can find a DT that will meet your need of speed....
Posted by: Darleen | June 12, 2008 at 07:57 AM
Look, here's my take. We are continually getting bashed (especially by ex customers and partners) for becoming a fast food stop. We hear time and time again that we're turning into "that burger place". The only way to differentiate ourselves is by offering something unique, to a defined customer base who will appreciate it, and returning to the coffeehouse feel that Truth says we're not. And we have to be willing to stick to our core customer, and increase both their avg ticket and their visits per month due to their increased satisfaction, and not please everyone. With that said, I don't know that the speed addict is the right customer to target. Just my opinion.
Posted by: P.R.I.D.E. | June 12, 2008 at 09:14 AM
sbux watcher,
we don't only sell great coffee at the bux but we offer a great experience. that is what our customers come in for and that is the way the service industry views us and has started to catch up on ... it's not just about the product it's about the way it's delivered, and customers who want mechanical, in-and-out service are customers who are probably mcdonald's customers ... people who want to gush about their grandchildren and their job and their latte at the barista behind the counter while the people behind them wait their turn to do the same ... will come to the bux
Posted by: boybux | June 12, 2008 at 09:24 AM
It seems sbux wants the dollars of ALL different types of customers, even when those different types of customers clash, making each others' experience less satisfying. I agree that trying to be the right company for every type of customer is not going to work. I would also think that some would cringe at the idea of narrowing the focus to a specific target customer, because wouldn't that mean less growth, and less revenue?
Posted by: StLouieDrip | June 12, 2008 at 12:37 PM
To be "exlusive" and "special"... you have to exclude people by nature...
Posted by: pat nerr | June 12, 2008 at 12:42 PM
I'm still holding onto the theory that we could split our brand into Sbux express, and Sbux coffeehouse. Each would cater to a different customer, and they wouldn't have to cross each other's path. This would be expensive, and would probably take a 5 year plan to implement, but I think it might solve for some of the issues, without having to exclude one group over the other...
Posted by: P.R.I.D.E. | June 12, 2008 at 04:34 PM
Speaking of starbucks, there is more good news. I work for a company that tracks gift cards, and we blogged about the free ice brewed coffee day on wednesday on savvywallet.com. It is only available with certain states, but it's free, and it's their promotion for their gift card for free wifi deal.
Posted by: Austin Chu | June 12, 2008 at 06:33 PM