Tuesday, September 18, 2007

Apple picks O2 for iPhone

Apple confirmed on Tuesday that O2, the largest UK mobile operator, will be its exclusive UK network for the iPhone.

The US computer maker’s mobile telephone-cum-digital music player, with touch screen web browsing, will cost £269 in the UK. It will go on sale on November 9.

iPhone users will pay 02 tariffs starting at £35 a month. They will sign up to contracts that run for a minimum of 18 months.

The iPhone is available for $399 (£200) in the US. It was sold for $599 at the US launch in June, but Apple cut the price earlier this month.

Steve Jobs, Apple’s chief executive, gave details of the iPhone’s UK launch at the company’s flagship UK store in London’s Regent Street.

He said the price variance between the US and UK markets was principally due to taxation differences, as well has higher distribution and service costs in the UK compared with the US.

Mr Jobs declined to detail of the revenue-sharing arrangement between Apple and 02, but the operator is expected to pass at least 10 per cent of the revenue generated by iPhone users from phone calls and data functions, such as web browsing, to Apple.

The iPhone’s most obvious weakness is that it does not operate on third generation mobile networks, which offer higher web browsing speeds compared with their 2G equivalents.

Mr Jobs and Matthew Key, chief executive of 02’s UK business, pointed out that the iPhone could run on wi-fi networks, which offer faster data download speeds than 3G.

However, wi-fi connections are concentrated in towns and cities. In other areas, the iPhone will run on 02’s 2.5G networks.

Mr Jobs said in a statement: “We are delighted to be partnering with 02 to offer our revolutionary iPhone to UK customers. US iPhone customer satisfaction is off the charts, and we can’t wait to let UK customers get their hands on it and learn what they think of it.”

Apple is expected to confirm this week that France Telecom’s Orange and Deutsche Telekom’s T-Mobile will be its exclusive iPhone network partners in France and Germany respectively.

Source: www.ft.com

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