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InPhonic Inc (NASDAQ: INPC) is a company that sells wireless services and devices online, both through its e-commerce site Wirefly and through private labeled websites it creates and manages for online retailers. Partners include brands such as Radio Shack, Cognigen, and AOLMobile.com and others, which sell wireless phones and cell phone service plans from major carriers like Verizon Wireless, Cingular, T-Mobile, and others. In 2005, InPhonic sold its mobile virtual network operator, or MVNO, called Liberty Wireless.

The wireless company, founded and headed by David Steinberg, went public in November 2004. The board of directors includes such notable names as would-be VP Jack Kemp and John Sculley (formerly of Pepsi Co and Apple). Inc Magazine listed InPhonic as the #1 company of 2004.

The company is headquartered in Washington, D.C. and maintains technology and operations centers in Largo, Maryland, Long Island City, New York and Reston, Virginia.

In addition to Wirefly, InPhonic operates some 6,000 other private label cell phone sales Web sites, according to company spokesman Tripp Donnelly. The firm said in early 2006 that it was the largest third-party online cell phone retailer in the US, accounting for one-third of the market, and that it sold 850,000 cell phones in 2005 alone. The company's Wirefly site has received a number of Internet awards, including Forbes magazine's Best of the Web for 2004.

Wireless Activations Business Model

Wirefly.com became popular for its aggressive pricing strategy, which includes "free cell phones after rebate" or discounts worth several hundred dollars. The terms of the rebates however require the customer to wait 180 days after activation, but no more than 210 days, to file the rebate. This unusual rebate model stems from the fact that the carriers will not pay a commission on a customer who does not maintain service for six months. This strict requirement has fueled outrage among a small but very vocal group of customers who are calling for the regulation of rebate incentives by electronics manufacturers and retailers.

Between 2003 and 2005, 1,500 people filed complaints about InPhonic with the Better Business Bureau charging that the company had falsly denied their rebate claims worth up to several hundred dollars in some cases. As a result, in November 2005, InPhonic's BBB membership was revoked.

External links

• Washington Post profile of InPhonic
• Consumers Irked by Cell Phone Rebates on Hold, MSNBC.com, January 13, 2006
• Wirefly.com
• InPhonic corporate site
• FAQs on submitting Wirefly rebates

• Cellular telephone companies of the United States