TELECOMS & MOBILE
O2 secures iPhone contract for the UK
18-09-2007
by Stephen Errity
Apple CEO Steve Jobs has confirmed that the O2 network will carry the iPhone in the UK, with retailer The Carphone Warehouse handling distribution.
Jobs was speaking to reporters at a press conference held Tuesday morning in Apple's flagship London retail store on Regent Street. He said the Apple smartphone would retail for STG269 plus VAT in Apple, O2 and Carphone Warehouse stores in the UK from 9 November. Customers will have to sign up for an 18-month contract on a tariff of STG35, STG45 or STG55 a month, all of which will include unlimited mobile data usage. They will also get free use of 7,500 Wi-Fi hotspots.
The terms of the O2 deal have raised eyebrows among industry observers, with the mobile operator understood to be handing over 40 percent of iPhone-generated revenue, plus a percentage of the phone's sale price, to Apple. Analysts also believe that the recent launch of the iPod Touch -- which does everything the iPhone does but make phone calls -- could hurt potential sales of the phone. Earlier this month, Apple slashed the cost of its 8GB iPhone in the US from USD599 to USD399 and announced that the 4GB model would be sold only "while supplies last".
The iPhone has also been criticised for its lack of 3G capability, running instead on the slower EDGE network. Jobs defended this strategy at the launch, saying: "The 3G chipsets are real power hogs that cut into battery life. 3G needs to get back up to 5+ hours." It is believed that a 3G iPhone is a possibility for 2008 if this target is reached.
Apple is expected to announce further agreements for European distribution of the iPhone later in the week, with the German deal tipped to go to Deutsche Telekom's T-Mobile and the French deal expected to be given to France Telecom's Orange.
Speaking to ENN in July of this year, IT analyst Tom Raftery said that O2 would have more to gain from an iPhone deal than previous favourite Vodafone, due the latter's larger and more established market share. Raftery added that O2 would be more likely to make the sacrifices necessary to secure the iPhone contract for this reason. Vodafone is understood to have dropped out of the bidding war when it realised it would be unable to secure a pan-European deal.
It is expected, though not confirmed, that O2 Ireland will carry the iPhone here when an Irish release is announced.
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