O2 Makes a Mess of iPhone 3G S UK Pricing Comments

"lol"

That's all I have to say.

I know you won't print this no matter how much I edit it, but seriously, the only thing that went through my mind as I was reading this article was "Ars*r*pe".

I do think the iPhone is a nice piece of kit (i don't own one) but O2 has always been a factor in me not getting one. I agree with everything in the article. It will be interesting to see what impact this has on upgrade sales.

might probably be fairer to crack the screen and ask for a replacement instead

Good old O2, trust them to make a mess of things.

I honestly cant believe the lowest tariff, 75 minutes and 125 texts for 30 quid a month?

are they on some kind of mind altering substance?

pluss you then have to pay between 96 and 274 quid for the phone!

Its clear that Apple have run with the ball on the Apps front and blinded all the normobs with their advertising. There's not a single person in my office this morning isn't considering buying an iphone, apart from those who already own one!

Personally, this pricing is pushing me further away from Apple and more towards an android based phone. I'm looking forward to seeing the pricing of the Samsung i7500.

Also, although the android phones don't have the quantity of apps of Apple, its interesting that they do have one called "Documents to Go" which you can use to edit MS documents. I've yet to see it, but I don't know of any other mobile platform that allows for document editing.

Finally, here's something bizarre: The Open Handset Alliance's (ie Android's) biggest supporter is Google, who are the world's leader in what? And what do you think is the one really useful website feature, which is missing from the www.android.com site? Go figure!

LoL calm down Gordon! I agree the pricing is very steep, but no one's forcing you or anyone else to buy one, or to upgrade your old iPhone. No doubt they will still sell like hot cakes to those with more money than sense.

File this one under Conspiracy Theories: O2 is also getting the Palm Pre. Could it be possible the company is pricing the iPhone in such a way that everyone goes for the Pre instead? We'll know more once 02 releases its pricing plans for that device.

I believe the word I'm looking for... actually the word I'm looking for can't be published so let's go with arrrrrggghhhhhhhhhhh.

Finally, FINALLY, I was ready to get an iPhone. The hardware was what I wanted it to be, the software is superb, the apps are getting stunningly good and I'd be getting a decent deal out of that £35 contract thanks to tethering. I was genuinely happy last night that I could finally get what I've wanted for two years now. And then O2 winds up and delivers the mother of all steel-toed boots to the groin.

How on earth can they justify this price? It's, what, £60 more for the 32Gb model than they pay in the US? It gets obliterated by everything else and the 8Gb, which should have been taking the fight to the Nokia 5800 with ease, is now a complete flop. Surely they're going to have to change this before launch if they want to get any takers for the top end at all or we're just going to see a repeat of the original iPhone fiasco in the UK.

Well, this just serves to further convince me that I will never buy an iPhone...
And, hang on, you say *just* £99 on a £45pm contract for 18 months for the original? That's still horribly excessive...

My plans to finally get an iPhone = Gone.

Not even Sean Bean could convince me to buy Apple usually, but I was starting to consider an iPhone for my next handset.. thank you O2 for bringing me to my senses :-)

Those prices really are very silly.

On a side note, how many iPhones have actually been sold here in the UK? I've seen just 3 in the wild since launch.

Annoyingly, even if O2 lose their exclusivity, I don't want to move away from them as a provider. Hopefully between now and the iPhone 3GS release, they will amend their pricing because of the amount of negative feedback they'll get.

This seems like quite a software-themed update from Apple all-round though. Quite looking forward to OS3.

font: inherit on this textarea, please?

OMG! I tracked the WWDC as it went and started rubbing my hands with anticipation when the iPhone and OS 3.0 were covered. Well done to Apple for putting right some things (MMS, Copy & Paste etc). I really like the 'Push to Talk' and software like Tom Tom's, very clever and so I was eagerly awaiting release dates. Well I can wait until next week but having seen what O2 has done I am very very disappointed. Last year for the 3G launch I queued with many people from about 5.30am on launch day - sad I know but there was a great atmosphere and everyone got along well. This year? No early upgrade option that doesn't rely on you selling a kidney to fund it and no rabid desire to go join what I expect this time will be a very short queue. OS 3.0 is released 2 days before the 3Gs and I like many I suspect, will satisfy myself with that. Do I want the new iPhone? Desperately! I am a massive fanboy of the iPhone/Touch, am I prepared to pay through the nose to get it? No. See you (maybe) in 5/6 months O2 when my contract us up. Quick question, when no one upgrades will O2 realise their horific pricing/contract error and do the right thing? Lets face it, most uptake on the 3Gs will be existing iPhone owners. Rubbish O2, you are rubbish!

BOFH_UK - I agree with your comments.

I was all ready to sign up for 18 months but I'm holding fire now. I appreciate it's a great phone but the price is extortionate compared to every other phone on the market.

Could O2 be wringing every last penny out of the iPhone before they lose exclusivity I wonder?

Bummer! Just reached the end of my Vodafone Blackberry contract and naively thought I'd wait for the new iPhone. I've been using an iPod Touch as a VoIP phone for six months now and, although previously I thought I'd never go over to the dark side, I have to concede that it's a lovely, lovely device. I was actually looking forward to just carrying one gadget around instead of two but this pricing strategy is a nasty shock. Did O2 make any money at all out of the last deal they did with Apple, I wonder? Or is there where they finally hope to recoup the money they shelled out for those 3G licences? Seems greedy or just plain desperate to me, but perhaps the cult is so strong that they've pitched it right. Like Bluepork says, an awful lot of people will still want one...

Its delusional to blame O2. Apple has made its money of the iphone cult and no one complained. O2 probably didnt make much money last time around and now they are cashing in. I cant blame them - the iphone cult has demonstrated its willingness to pay up. So hey, enjoy.

I was all ready to get the new iPhone a day ago, but the pricing is ridiculous.
I will be steering clear.

As acgs1 points out, that just rams home how expensive smartphones are, even without this recent nonsense from O2. I mean, even the cheapest iPhone on the cheapest contract will set you back £625 over 18 months. Is an iPhone really worth that much more than a £160 iPod Touch?
I realise that the unlimited data contract and line rental are worth a fair chunk of that sum, but that's a difference of £465! Really?!?
I'd pay good money for a phone that I considered to be reasonable value, but this is way off the mark.
And don't get me started on those tethering charges...

I was all set to get an iphone but luckily for my wallet Apple decided against a nano size phone and an OLED screen. O2 have sealed the deal with an immense price tag. With 02 getting the Pre I needn't bother with this network.
I too will be going down the Android route although I am mighty tempted by 3's Skype deal...

Just like BOFH_UK, I have been itching to get the new iphone when announced - then splurge a bit more on an up to date TomTom. When I read these prices, though, it makes me go all Victor Meldrew!!

I need to wait till late August before upgrading and can only hope there is enough backlash between now and then that the prices are a bit more sensible.

I tether my Win Mobile (O2 Orbit 2) now and again when away from home and use some of my 200MB/month Web Bolt On and just consider it part of the service. So now I have to pay £15 a month for a few MB of tethered data? That is a step too far. Why not just put a cap of 100 or 200MB tethering and the rest of the data only via the iphone?

Must sign out now before I get too worked up :(

Hmm...

I quickly jumped out of my old contract in March so i can get the new one on release day.

But in no way am i going to spend £275 on a phone and then £35 a month for the next 18 Months.

Do o2 honestly think they'l shift them all on release day as well.

We can only hope its a mistake. (Although unlikely)

@Bluepork. Here's a video of Documents to Go for Android: http://www.youtube.com/watch?v=iicDyaCrk14
I also agree about the Samsung i7500. Is this phone coming to O2?
.
@Ripsnorter. Good point. I'm looking forward to seeing what the pricing is like for the Pre. My 2G iPhone contract has come to an end and the new version looked promising for a second. I just can't believe that tethering and MMS costs so much. I thought Apple was going to release multiple versions of the phone?

Ok, well, (as per my comments yesterday on the iphone), I'm now thinking....NO.

Software upgrade it is, and wait for 6 months, to either go back to (better reception) vodafone or move on an Android phone.

Sorry Apple.

Has anyone told O2 we are in the depths of a recession and no one has any money. I would suggest people vote with their feet and purchase an Andriod phone (Voda) or buy a Nokia E75 and put it on anything but O2. I can see the AB02 becoming used .... anything but 02. What a stupid and ill conceived idea.

I have looked forward to the new iphone being announced as I had gained approval from the finance committee (wife) to purchase one. Disappointment number one came with the specification of the iphone 3G S. In reality it’s a minor upgrade rather than a whole new phone. But it’s an improvement, so that’s the one to go for.
Disappointment number two is the pricing on O2 – it’s outrageous and could be a deal breaker for me. All the comments from the WWDC suggested price parity of the 3G S (16GB/32GB) with the 3G (8GB/16GB), but this has not translated across this side if the Atlantic. Am I still going to get an iphone 3G S? Probably not at these prices! O2 do have time to change my mind…..

So awful pricing plans and a hardware upgrade that tries very hard to conjure the word 'meh'. I'd say the top spot may be ripe for the taking over the next 18months, all someone needs is a decent phone/software combination, decent pricing and a good targeted ad campaign and the iPhone will face stiff competition.

heh this is partly why I went for the Touch HD. if you include the cost of a 16gb memory card and CorePlayer registration fee, my phone cost £70 up front, and I get 500 minutes, 400 texts and unlimited web for £35 per month. compared to that, even the original iPhone 3G was a bit of a rip-off!

By the way Bluepork, Quickoffice is available for all phones, and can edit MS docs on the move, although it costs money - not sure if "Documents to Go" is free or not.

On the other hand, the Nokia E-series phones have Quickoffice installed out of the box.

Disgusting f*(* O2

Could this be o2 charging for allowing its iPhone users to have free Data usage?

Maybe this forces me to keep this phone for another year, and wait for the inevitable "iphone 4G" at next years WWDC?

Oh and the point I was originally going to make was, I've toyed with the idea of getting an iPhone a few times, but the network was a big issue for me, plus I'm not a fan of the Apple hype machine (though they do make some super looking products).
This pricing structure (assuming that it's similar in Ireland - which is actually usually twice as bad as the UK when it comes to phone pricing, so I'm expecting it to be more expensive again over here) is a symptom of both of those things, and as a result, will keep me away from the iPhone for the foreseeable future.

@Bluepork: its interesting that they do have one called "Documents to Go" which you can use to edit MS documents. I've yet to see it, but I don't know of any other mobile platform that allows for document editing.

How about the Iphone :). QuickOffice maybe, this has Word & Excel editing.

Thing is, if this is O2 trying to maximise profits then they're being run by a group of monkeys. And not very smart monkeys at that. In the current climate they'd be better off selling the handsets for damn near cost (which we know is a MAX of $300 and I don't believe for a second that AT&T are selling theirs at cost so it's probably less than that) and getting a nice fat revenue stream for the next 18 months during which they treat those new customers well enough that they stay with O2 when the contract expires.

As it is they're going to have bombscares across the country with that price, struggle to shift their stock and generally annoy their existing customer base. Hardly a smart stratergy if they ARE loosing exclusivity and people can go elsewhere for their iPhones.

Just like several others here I had decided to get an iphone, but with this pricing, they can ram it. I had planned to order right after WWDC. Now my choice is between the G1 or waiting a while to see if they sack the imbecile who thought up this pricing and get it back to sensible levels.

I hope theirs sales plunge and Apple does the right thing and sacks them. Apparently they only have 6 months left, perhaps this is a last, desperate attempt to gouge customers.

It's a shame the upgrade pricing is not that inviting, I was thinking of giving my wife the IPhone3G, I could then have the IPhone3GS, this way O2 will have gained an extra customer, my wife is currently on Virgin, so looks like O2 have missed out there.

Exploitation and greed, that's all it is. They know that they have cornered the market and that there are enough gullible buyers out there.

C'mon guys this is obvious. Clever O2 have realised that all Iphone3G customers are tied in for another 6 months. So this is aimed at new customers now (who presumably payback this year at these prices) to avoid unnecessary investment in what is a difficult year and then what are the odds on the prices coming down after xmas just as existing customers come up for contract renewal. This will probably annoy customers purchasing now but since they will be in contract for a further 12 months - who cares.

Take note everyone, next year is touted as the year of a new iphone, this one was all about software. If you buy now or upgrade at xmas you are very unlikely to get your hands on a new one until Jan 2011 at the earliest.

Re: 1 MMS = 4 SMS
This has been O2's policy for a number of years and I actually don't mind. If you really think it's that bad, then look at the prices that 3, TMobile etc charge per MMS..
Personally I'm an ex-iPhone customer still with O2 but on Android ;-)

This is a completely confusing pickle of a pricing structure, and i'm irritated because like other people, after 2 years I finally thought I might try the iPhone.

The 8GB 3G should be free on all 18 month contracts. Should have been free at launch.
£30 p/m on an 3G 18 month contract - and getting only 75 mins and 125 sms - JOKE. (I know O2 are trying to force customers to jump up a tariff, but the discrepancy between the two is huge and unacceptable - i'm surprised they get away with it)

3GS handset prices are (unjustifiably IMO) very high, as expected - but what really grates me is the high handset prices AND the high tariff structure and these crazy 24 month contracts that are all the rage these days (the iPhone 3G cost ~ $170 to produce so even if you sold it without a contract at $500 - you'd be making a killing) ...and that's before we get to the tethering disaster.

I have been using tethering over bluetooth and USB on the O2 network for years now and have never been charged a penny for it, and nor should I. I have paid for an 'unlimited web' bolt-on, so what business is it to O2 HOW I choose to use it? Why the hell are you discriminating against customers (this goes to all carriers in the UK and abroad) who simply choose to view their data on a larger screen?

It doesn't cost the carrier any more, I simply don't agree with the statement that people will download more if they are using tethering to a laptop...It's simply too slow and too unreliable (and too technical for most). Besides, if my contract states that I have an 'Unlimited' data bolt-on - I EXPECT TO BE ABLE TO ACCESS THIS HOW I WANT and through any device I want. (I will, of course observe any fair usage policy of say 5GB per month)

What we need is a more transparent system of financial accountability for all products - I'd like to see the profit margin for each item clearly marked along with the price for all high value products from phones and tariffs to cars and food - and who's pocket the money's going in to.

That iPod Touch isn't looking so much like a 2nd Class citizen's product now, huh? And with the price cuts on top of the 2.5% VAT drop, there's never been a better time to buy a Mac - and that's important because with Apple's rebate offer, you can grab an 8gig Touch for a mere 20 quid!

I think we should all go to o2 shop show an interest in it then all complain very vocaly and very articulately about the rip off tariffs with numbers on hand for comparision.
the networks need to learn they cant take us for a ride anymore and here we have been gifted a perfect opportunity to show and tell them that this is the case.

It's not just the iPhone that O2 overcharge for. Look at their other phone/plan prices. Absolute rip off! For example just check out the blackberry bold plans compared to what the 3store offer.

My contract is up next month and I certainly won't be giving O2 my business. I'm hoping 3 get the Samsung i7500 or I'll move over to Vodafone and pick up the HTC Magic for 30pm with free internet.

@ GoldenGuy

... wait, repeat that? a £20 ipod touch?

@ilovethemonkeyhead

... when you buy a Mac ;)

@ GoldenGuy

I'm confused as to why your reaction to being ripped off by Apple and Apples partners AGAIN is.. to buy a Mac? I just don't understand. I'm dumbfounded at the whole iZombie mindset, I really am.

It's like Apple don't even need to pretend to offer value for money anymore.

"Documents To Go" was on the original Palm platforms I think. And is definitely on the Blackberry platform. Some Blackberries have it as a non-editing (read docs only - but upgradable) version built-in.

Hello O2, I have more money than sense, can I have one of your new iPhones if I give you all of my money?

I just ordered a PAK code from O2...they were very interested to hear why I was asking for it and offered many incentives to stay on, sadly none that caught my eye.

They did say, with reference to the iPhone 3G S prices & tariffs - '...these are the prices we have to quote to you now...' - insinuating, to my ears, that prices may be set alter on or after the official launch date.

Wait and see I suppose.

Jay said on 9th June 2009

I think we should all go to o2 shop show an interest in it then all complain very vocaly and very articulately about the rip off tariffs with numbers on hand for comparision.
the networks need to learn they cant take us for a ride anymore and here we have been gifted a perfect opportunity to show and tell them that this is the case
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do you actually think that people in stores decided pricing of the phones? I dont think any large company works like that, man

- your best bet is probably organising some kind of large petition and aiming it at their press team or head office

Why doesn't Apple sell unlocked phone? I refuse to buy one till they do that!

I was so excited to finally see video recording and sharing on the iPhone, as well as MMS etc etc. I was looking forward to finally taking the plunge, but like so many others who have posted here, I will steer clear due to these ridiculous prices. Apple seriously need to allow more providers.

Mobile Phone companies are awful! I can't believe that they think this is reasonable; don't they have meetings with clever people about this kind of stuff rather than just thinking "how much money can I get without thinking about it?"

Easy one for me. I was looking upgrade to the new model, now I'll have to wait until iPhone 4. Or Pre-2..

Who knows..

@theory28
I know that they dont negate any effect on the pricing but the stores do report higher up and its a very good place to start, obviously a large scale petetion is a good idea but they may likely ignore that.

I suspect this a ploy by Apple to protect low stock levels so the phone doesn't run out straight away. There will always be people willing to pay a premium to have the latest and greatest straight away. Perhaps there are issues with producing enough and when they have resolved it, the price will come down.

I am just really glad the V3.0 software will be available for my 3G so I'm not missing out on too much by not getting the 3GS immediately.

If this is their attitude, I shall be looking forward to the end of their monopoly when I can take my iPhone custom elsewhere

I reckon this pricing and policy on upgrades will soften sooner rather than later. It feels a little bit like O2 haven't had much time to form a strategy this time around... and the launch date is soon, didn't iPhone 3G launch in August? I was expecting a similar time frame this time around.

Anyway, currently this is a mess. O2's mess!

Only when students buy a new Mac (I've still got access to my old student account!). But yeah, the rebate form allows for 145 quid off any Touch, so that's 20 quid for the 8GB model. You know, if you just go on to the Live Chat function and say I'm from X university, they'll give you a link to the education store, normally only accessible on campus.

Now Tim - that's not fair. I've never been an Apple fanboy - I like a lot of what they do, and I dislike a lot too - their prices in particular. And I've NEVER liked the iPhone. But I've always stood by OS X and maintained it is worth a bit of a price premium. And I respect Apple's decision to bring down prices a bit now. As for the iPhone prices in the UK - that's all O2's fault, and has nothing to do with my decision to buy a Mac. I was just reiterating my position that an iPod Touch has always been a better product, and now with the rebate offer with a new Mac for school, there's no better time to dive in where :

8GB Touch = £20
16GB Touch = £69
32GB Touch = £138
Classic = £30

Not sure if it needs to be through the education store or not but you must be buying a new Mac.

Only mugs buy Apple products.

What a massive massive joke. I've been on the highest 02 iPhone contract since the launch of the 1st Gen, upgraded to the 2nd - and will get well and truly mugged off if I want a 3rd Gen? I left Orange to come over to 02 - The worst example of loyalty I have ever seen. We'll all be leaving 02 in our hordes when the exclusivity deal with Apple is over.

I have thought about this a bit more since I posted higher up. Initially, I said I hoped O2 would drop the prices prior to my upgrade in August. I now feel even stronger:

If the prices do not drop significantly, I will either stick with my clever, fiddly, tetherable and unlocked Orbit 2 on a call only tariff or move back to Vodafone and get something else.

Even if I was a millionaire, I couldn't live with myself if I paid them that OTT amount.

@starling - Good look on 3 mate, if you do pay more for o2 then I think it's well worth it and if you are thinking of moving then Vodafone is a good alternative but at the end of the day you pay for what you get. 3 are cheap for a reason, they are rubbish!! I don't know anyone who has renewed there contract after 18 months most people can't wait to get off it. Also what many people don't realise is it costs almost twice as much to phone a 3 mobile phone(last time I checked) that is why they can afford to offer cheaper tariffs.

Back on topic - Yes I was going to get my first iPhone this year but these prices are just silly so i'll be sticking to the OS3.0 upgrade to my 16GB touch for a little longer which annoyingly Apple still insist on charging £9.95 for!!

O2 - shame on you. Shafting the very people who have made this bit of 'exclusive' hardware a money making dream for you and then you come out with this. VERY poor, should be ashamed of yourselves.

I think it was Eric Cartman who said it best... "screw you guys"

Good heavens!
I actually feel that I must complain about writing style on the TrustedReviews site.
When it comes to the iPhone, I recognise that it does a lot of things better than other manufacturers' offerings, but the articles published on this website make me wonder if the reporters aren't actually in Apple's pocket (though I'm sure that's not the case).

O2 are entitled to charge what they like for this phone and will only hurt themselves if they set prices at an unattractive level. Your whining might encourage them to revise their prices down, but they are in business to make profit and their prices will reflect that need (they are legally required to make money for their shareholders, not necessarily to look after their customers - although it is good business practice).

...but what I find most insulting about the writing style on this site is exactly what puts me off most iPhone users: just because you own one seems to make you entitled to an upgrade the moment a new product comes out?
Justify that horrendously arrogant stance.
I can think of no other consumer product where I am 'entitled' to an upgrade when the new variant comes out. It might be stated as a sweetener in a deal, but that's up to the seller, and I certainly don't rely on it.

Do you really think O2 would keep getting exclusive deals on the iPhone if they weren't raking in money with the product?
Times are tough and profits need to be made.
If you are so vacuous that your life can't continue without this upgrade then you need a long period of deep introspection.
It's a simple choice: pay up or shut up, and I bet most people will do the former.
Nintendo haven't dropped the price of the Wii. Why is that? Is it because they are conspiring to rip the consumer off? NO! It's because the Wii keeps leaping off shop shelves at the price they ask. When sales volumes ease then they will consider price reductions.
O2 know that people want the iPhone and it's customers won't leave just because the prices are high. Why? Because you can stick with your existing iPhone and get all the same features with an OS upgrade (it just won't run 'quite' as slickly and your camera will be 1.2MP less) and they've looked at what the competition offer and they are still streets ahead.

We live in a free market. It has massive benefits so long as it remains free.
If you truly want to stick it to O2 then by all means leave them, it's the sensible thing to do...
...but I bet you won't; and that's YOUR fault, not theirs.

"I hope theirs sales plunge and Apple does the right thing and sacks them. Apparently they only have 6 months left, perhaps this is a last, desperate attempt to gouge customers."

I've heard the same in that their exclusivity ends in 2010.

I've been waiting to buy an iPhone since the first gen's were announced and was all set to go with this one - until I saw those ludicrous prices!!! I can sort of understand the policy on upgrading from 3G to 3GS - this is the procedure on all other makes and models so why not iPhone? They've set a precedent which is unfortunate for them...But the price of new handsets seems absurd. I fortunately have access to a staff discount but unless prices drop to the same or lower than the previous 3G tariffs, I won't be bothering at all...!

I must admit I had a little chuckle at all the squealing going on here about O2s price gouging. Nobody is forcing anyone to go out and buy it and people already locked into contracts knew what they were getting into when they took them out. There is always something bigger and better around the corner and whining about being stuck with an obsolete phone is pointless. Its your own fault.

That said it seems to me that Apple and O2 deserve each other.

I feel like o2 has completely screwed all of us and now I'm just hoping they might u-turn on all of these appalling news.

I got my iPhone 3G on the £35 plan and was planning to upgrade. Now with all of these ludicrous prices, I can only hope enough of us raise our voices and make them reconsider.

Hahahah.. this is rediculous. I have to wait till a little while yet till my current contract runs out, was all set to get this new iphone... but now there is no chance.

- The 8GB should be free on a £20 contract at this point.
- The 16GB should be free on a £30 contract.
- The 32GB should be free on a £44 contract.

- £20/pm with a £50 payment for 16GB, £100 for a 32GB
- £30/pm with a £50 payment gets the 32GB

All 18 month contracts, all free data and tethering, 200mins+200 txt for £20/pm, 500+500 for £30/pm.. etc etc etc....

How is this difficult? People would flock to O2 and apple waving their wallets..

£75 a month for 18 months! And you still have to pay for £100 for a 32GB. That comes to £1450! If you get the 10GB tethering "bolt on" with that it will come to £2000 for 18 months... seriously O2 much think everyone in this country is mentally defective.

I really don't know what to feel right now, I feel anger towards O2 for taking advantage that they are the sole Iphone provider, I also feel disappointed with Apple in particular for being short sighted, I know they might think they are cashing in right now but this is a short sighted strategy, they should really consider long term and apprecaite the customers out there who are willing to buy thier phone and be on contract for 18 or 24 considering the current economic situation. I beg of Apple to get rid of O2 and allow other operators to sell this phone in the UK to create competition. This the only clear way to ensure the phone is picked up by a majority of people rather than keeping it exclusive to the phew who have more money than sense.

it's the dumb pipe thing again - for a mobile phone, it's pushing the sheer boundaries of it's prices, considering it probably cost pennies to make, too.

for all intents and purposes, on PAYG the 32GB iphone should cost £350. a price that doesn't make apple's macbooks look cheap.

Does anyone else get the feeling from this psychotic pricing scheme that O2 are acting as if this the last iPhone they'll have exclusivity over, and are eeking out every last penny they can? Do they know something we don't?

@jopey - Spot on - i'd sign up to one of those right now :)

Those are the sort of tariffs I'd expect to see relative to the competition's current offerings. Personally I don't care about 'upgraders' being shafted since no other company ever offered me this option when I was stuck with my cr@ppy sharp handset years ago!

@technology changes blah blah blah

If you think we live in a free market you really do have blinkers on.

@Goldenguy

Apple have not shaved as much off prices of Macbook Pros/Air here as they have done in the 'States. Making the price differential quite a bit wider.

I'm on a Samsung Tocco which has served me very well over the last year but I was waiting to see what Apple had on offer this time round. For me the 3GS has the right performance and feature set for me to consider but for now O2/Apple have priced me out of buying an iPhone.

I have to admit I've been looking forward to buying an iPhone but I'm just extremely disappointed that it'll be out of my price range :( especially when I would consider buying it for the US pricing range. Too bad the Palm Pre isn't out anytime soon in the UK though I suspect it'll have a similar pricing structure. I guess the samsung i7500 might be my next phone.

The line break between the 18 and 24 month tariffs is wrong.

And thats the only word I can use to describe the pricing, hahaha.

Its a lot of money, just like everyone else. But O2 and Apple have the figures and must be able to make a profit at those prices or else they would not be at those prices.

Would a USA iPhone 3gs work in the UK? How many can you fit in a suitcase and is it worth the price of the air fare.

If I want it enough I'll but regardless or product and price but my annoyance is with the USA/GB difference yet again.

Like many others that have posted here today, I was seriously considering getting myself an iPhone 3GS, but am not prepared to pay the premium that O2 are demanding. Until O2 loses its iPhone exclusivity and we get some competition from other networks in the market, it looks like we'll have to pay through the nose. O2 could be missing out on a swathe of potential customers with the pricing approach they're currently taking, which seems somewhat short-sighted to me. I think I'll bide my time...

Oh dear.

Guys, get some perspective. This is standard mobile phone industry practice for subsidised handsets. No company allows users to upgrade early simply because a new model has come out. D'you think any operator lets Touch Pro is going to let users break contracts to upgrade to a Touch Pro 2? Or lets Nokia users upgrade every time a new model comes out? Why should iPhone users be any more privileged? You guys got a special deal the first time, great, but that was because the first round of iPhones wasn't subsidised. What you've getting now is simply standard industry practice in relation to new models, no better, no worse.

And it isn't only O2 that's doing this - AT&T has put the same restrictions on upgrading in place. Much as I loathe O2, they aren't being specially evil here - no more evil than other companies.

And, to be perfectly honest, the price differential between the US and the UK on plans for this phone isn't much worse than the differentials we're seeing on dozens of other consumer products that've been introduced recently. Really. Let me tell you about the UK prices of DSLRs and accessories sometime (or better still, don't let me tell you - you'll never be able to stop me ranting).

how dare o2 not let me break my 18 month contract. the scoundrels. i could understand if i was a nokia user but how can they treat an iphone owner this way.

Calm down everyone!

You don't have a "right" to buy an affordable iphone. It's not a basic human need - it's a luxury consumer good. A high price is a feature and helps differentiate a product (Nokia Carbon Arte anyone?).

The 3G model was a very good value proposition (less so the Mk1), and for the features it offered I felt it was worth buying at the price - so I did. However all the rhetoric, from avid users and review sites such as this suggests that the iphone is so far ahead that it actually represents value at a much higher price point. It makes perfect sense to test this with a new model.

If you can't afford it, you'll just have to stick with your old nano, keep a paper diary and give up those dreams of surfing porn on the bus.

@lensmann.

Exactly my point I've just bought a DSLR and was horrified at the differences in price between the US and UK.

I was considering moving from Orange to O2 fot the iphone but now I'm not so sure, maybe I'll see what Android phones Orange come out with.

And why the hell can't I have a good old 12month contract anymore??

@skotbites - "And why the hell can't I have a good old 12month contract anymore??"

You can on o2 simplicity - http://shop.o2.co.uk/simplicity-12

You just don't get a phone thats all however seeing as you have a shiney new DSLR just buy yourself a cheap ass phone unlocked:-)

Trust o2 to take a beautiful phone and shaft the users come upgrade time - i can't believe it myself. It's no longer even a premium product; it's absolute madness.

This is o2's version of revenge for losing those roaming charges thanks to OfCom.. gotta make that money somewhere folks ;)

Where's the "affordable" 8GB 3G iPhone that Phil Schiller said the US was being offered, how is it that the UK doesn't need affordable handsets?

Looks like the Church of Scientology and North Korea can take a breath...Apple and O2 are taking the heat!

An O2 spokesman confirmed that the subsidy on the new iPhone has been reduced, hence the increased price. It is around 70-80 percent more for the equivalent model this year.

Hilariously, O2 also said their iPhone tariffs offered the best value available for - conveniently forgetting they have a UK monopoly on the handset.

love the iphone - check
ready to upgrade - check
have the cash - check
am a complete mug - ah, time to look elsewhere

Here's an idea... don't get one.
That's what I tend to do when I think something isn't worth the dosh.

Thanks to those of you who pointed out the existence of Documents to Go and Quickoffice to me. They are both commercial packages, at a similar (low) price.

I take issue with the comments of "Technology changes, and so should you". Nice name though.

With relation to O2's behaviour and the free market, I think the issue is whether exclusive distribution deals distort the market. For a market to be "free", there needs to be competition, and although other carriers can compete by selling similar products (ie android, RIM, Nokia phones etc) in this market, the differentiation between these other products is very strong. Ie rightly or wrongly, consumers do discriminate between the iphone and all other smart phones. Therefore, in the market for iphones, there is no competition at all. O2 has a monopoly.

You can argue that Apple has a right to create this kind of situation because they invested and created the product, so they should be allowed to sell it how they want. You can argue that Apple is able to maintain it's perceived superior _quality_ product by exaggerating its profits through an exclusive deal. That's open to discussion. However, from a _price_ point of view, that the consumer would be better off were there more channels available for purchase of the iphone cannot be argued with.

We do indeed live in a free market, in general. That also means that where perceived market abuses arise, we are free to protest against them!

"Apple have not shaved as much off prices of Macbook Pros/Air here as they have done in the 'States. Making the price differential quite a bit wider."

@Tony
I do realise that Tony. And like TR themselves have said, even with the price cuts the MBA is still a bad joke when it comes to value for money. It really isn't much more than a fashion accessory, still.

Bluepork: I'm not convinced as far as the rules on upgrades go. HTC's WinMobile phones aren't exclusive usually, but you can't break a contract to upgrade there either.

Anyway, your theory'll be easy enough to test. There are markets in continental Europe (e.g. Italy) where more than one operator has rights to sell the iPhone. We'll just need to wait and see if the rules regarding upgrades there are any different (assuming they subsidised the iPhone 3G in the first place).

The other amusing thing about this is that it should be a lesson to those who let themselves egt suckered into 18 or 24 month contracts just to say they owned an I phone. Everyone knows that 12 months is relly the longest you want to be locked into a phone - the technology moves on after that. So those people got suckered and are now paying the real price.

Also laughable to idea that Apple should "sack o2". I mean where do you think Apples nice profit numbers come from? They stick it to the O2s of the world for "exclusive contracts" - and 02 is the proxy who in turn sticks it to the apple cult to squeeze their money out. Had it been Vodaphone or anyone else who paid ungodly sums to Apple to be the distributor of this phone, they TOO would do the same. They have to, in order to recoup the huge sums Apple takes.

So dont blame 02. They are just collecting the money that apple will report as profits next quarter. If you dont like the game, then well dont buy an iphone. But as long as you subscribe to the game, then you WILL be played. Just the way it goes.

Yeah they're adapting more suitable policies to make themselves more money. I hate 18 month contracts and I hate 24 month contracts. Globalisation is taking hold of adapting world-wide cellphone policies. I remember the times when it was possible to say "our UK cellphone networks and plans are much more advanced than in the US" because my friends would always have the most mediocre phones compared to what came out here.

Now it seems there's a lot more streamlining to ensure the best of both worlds, perhaps? although "the best" is the US getting better phones and the EU doesn't really have any best...

Yeah, what happened to the 12 month contract? It's a dying breed.

Vodafone's plans for the HTC magic are a case in point. All of the plans they offer will supply the phone for free on a minimum term of 18 months. Surely I can't be the only person who wouldn't mind paying some cash up front if I got a better deal in the long run?

Shorter contract term? Lower monthly cost? No such luck...

At the end of the day "you dont like it dont buy it" simple

"That said, the fact that o2 doesn't seem to even offer any 12 month contracts anymore is a bit worrying"

Sadly I don't recall sites like this (I'm not specifically labelling TR's writers, but instead almost the whole industry) kicking a fuss up when the 12 months contracts were slowly being dissolved in favour of the U.S. favoured 18 & 24 month contracts. I kicked a fuss up, that's for sure!

Indeed a lot a journalists justified this action, arguing that the ever increasing price of handsets and the technology used justified the contract length, in so doing swallowing the Telco's bait, hook, line and sinker. Big telco's don't want to invest all their shareholders money in expanding their networks and technology base (such as the 3G licences) so the 18-24 month contracts are a great way of extracting more money from us with us getting very little in return - prices have gone UP if anything! (in relative terms)

So we can get 'free' handsets in this country on most tariffs, but with the cost of producing an iPhone 3G being around £100 (depending on FX) - and the cost to the consumer of say, a 24 month contract at £35 pm and another £100+ for the handset - you're looking at almost £1000 (without tethering or extra billed events!) for what? Two years mobile phone calls and occasional web surfing - oh and emails on the move. All of which is very convenient, but hideously expensive.

Now were all expected to sign a minimum of 18 month contracts, which as Kanu points out, is the chronological equivalent of an ice age when talking tech. The fact that they don't even offer any 12 month contracts any more, even at a slightly higher monthly rate is very frustrating, especially when most of their products are on a 12 months life cycle or shorter.

I welcome the idea of networks merging to use each others base stations and coverage and thus keeping costs down. It would be great if they could share more technology for the good of the consumer too, especially when it comes to providing a cheap, easily available connection to the internet - which is rapidly becoming as much of a basic necessity as water and energy.

In short "Bring back 12 month contracts!" and be good dumb internet pipe providers, please :)

WHAT ARE YOU ALL TALKING ABOUT!!!!

Apple did not reduce the the price for the iPhones in the US, it is AT&T which has reduced the price which it is selling them for. Based on todays exchange rate the $99/$199/$299 prices are now TOTALY inline with the o2 uk £30/£35pm 24-month prices. Also if you compare the "24-month £35pm" o2 uk tariff, with the equivalent "24-month $75pm" AT&T USA tariff, then you would see that the exchange rate of $75 is £45!!!

So, AT&T is now the same price as o2 to buy the phone, but AT&T is still £10pm more per month then o2! Well done o2 for being cheaper in the first place.

Don't believe me? Check out www.att.com , todays exchange rate is 1.638

Wow, >100 comments.

A record? Shouldn't there be cake?

Clearly this is a popular and emotive issue.

My 'free market' point was that O2 are perfectly entitled to reach an agreement with Apple to distribute the iPhone.
They will not pay Apple for this deal, but will commit to selling a certain number of the handsets. They set their prices at a level at which they are likely to meet this commitment.
Of course, they release their prices and eveyone cries foul. We then get a string of comments here about people 'put off buying', 'unhappy with the price', claiming they 'will leave O2 when their contract expires' or 'waiting for the next iPhone to come out' (by far the worst conceit).
People here are claiming they will take their business elsewhere. Well, I'm sure O2 will cry themselves to sleep tonight about that.
If enough of you club together to take action then you could achieve something, but you won't because you've already shown yourselves to be weak, and as individuals you simply don't have the buying power to influence. O2 know how you'll have it at all costs, and know what they can get away with.

The biggest kick to the crotch is the TrustedReviews staffers whipping up this feeling instead of being their usual impartial selves.

Oh yes. Were any of you aware that the other telcos in the UK require their branding to be prominently displayed on the front of all handsets they sell? O2 didn't mandate this for the iPhone, and Apple would have insisted against it.
You can have competition, but would your shiny handset look as good with the Vodafone name splashed across it?

If you're that concerned, why don't you just buy it SIM free for the real cost, rather than whining that the telcos aren't giving you enough freebies?
That £1000 TCO that was calculated probably includes O2 having to deal with childish Apple fans who are about as much fun to deal with as being shot through the neck with an arrow only to discover it has an enormous gas bill tied to it (to tie in with Mr Vandervell's recent 'asthamtic ant' comment).

@Ryan - You may have noticed though that the UK and US markets are not the same. Here we have a FAR more competitive market where the iPhone was, by a long way, the most expensive smart phone around. AT&T have kept their prices the same for the new models while introducing a cheaper 8Gb iPhone. In the UK O2 have put their prices up by over £100 from the 3G models while adding an additional, and very steep, charge for data tethering. On the 24 month plan the 16Gb iPhone 3G was FREE on even the cheapest package (and still is if you go to Carphone Warehouse). The 32Gb 3G S now costs £175.19 on the exact same package.

Now do you understand what we're going on about? I know of no phone on the market which woudl cost £175 on a £35 a month, 24 month contract. In fact I can't think of one that even comes close. As an example the Nokia N97 on Orange is currently £50 on a £35 a month, 18 month contract for 600 minutes, 3000 texts, unlimted evenings and weekend calls and unlimited internet access. On the old price structure the iPhone was free on a plan that was slightly lighter than its competitors but not far off. In 12 months the industry has moved on and the iPhone is now costing £225 more on the same terms with a FAR worse contract.

I see you're a Black Adder fan, Technology Changes etc...

Whilst I agree with your point about a lot of people (especially iPhone owners) being full of hot air when it comes to them actually demanding their PAK codes and voting with their feet, I still think that this 'uproar' is good for consumer awareness in the long run.

We're all paying way to much for the benefit of simply being able to communicate with each other, which is the imperative factor in facilitating the continued evolution of any society. The free flow of concepts, theories, data, opinion etc...shouldn't be the preserve of the wealthy.

Agreed, that's got nothing to do with the iPhone directly (!) - it's just good to see people finally questioning the cost / benefit relationship of their beloved Apple brand, which is a first :)

@Gordon.
Good point when taken for the site as a whole, but I (and I suspect many readers) would take issue with the 'Trusted' part of your name if we felt that your 'opinion' on other stories was as flagrantly biassed as it is with this one.
There are other flagship phones that have been released with 'scandalously' high price tags and long-term contract tie-ins, but I don't remember reading articles about those as emotionally charged as the one that sparked this comments section or the comments that followed.

@lifethroughalens
Yes, consumer awareness is an excellent thing in a free market, but that's not what I'm reading here.
If they don't like the price, they should vote with their wallets; not grumble and then shell out anyway.
Their arguments sound like a plate of beans negotiating their way out of a cow's digestive system.

@Technology changes

"Their arguments sound like a plate of beans negotiating their way out of a cow's digestive system"

Brilliant - you have a certain way with words that paint a very vivid picture! :)

@lifethroughalens

"Brilliant - you have a certain way with words"

Well, Richard Curtis and Ben Elton do.

@ All, I see people complaining about eighteen month contracts and twenty-four month ones.

Well here in Canada on Rogers (sigh...) us prospective iPhone users are tied to a three year contract! And yet we still have to pay for the damn phone no matter what the term!

Some people don't know how good they have it...

A 36 month contract?! Are you insane Ohmz?! How badly can someone want one of these damn phones?! If the contract was that long, you should have just told them to sod off and save up for the pay-as-you-go price.

@GoldenGuy - Orange UK are already doing 36 month plans which I can only see other networks following. I Know for me I'd prefer to save up for the handset and stick with SIM only tariffs from now on, that way you can always find the best deal and change network whenever you feel like it.

36 Months? I'm flabbergasted. Governments topple and new islands are formed in that time...and you'll still be on the same contract with the same POS phone! WHY do we tolerate this cr@p?

I know Canada is a big place with few people, it must be expensive to get the network coverage up and running...BUT! If i lived there i'd just dust off the CB radio for the short stuff and rig up a 250W 10 meter set up for the longer chats, should get Tokyo & London on a good night :)

Then again, I suppose we don't want to talk to the sorts of people who talk at night on HAM radios...!

I already hate 18 month contracts. I'd rather take just 12-month long ones but as we all know, they deliberately make the tariffs on those incredibly stingy, with the inevitably steeper handset cost. Point is, I know I'm gonna want better technology 12 months down the line and I need the option to change networks.

Lensmann,

Your point about the market in Italy is interesting, and it will be interesting to see what will happen to the price there. However, the situation there will still not really be a true test, because the market for mobile phone carriers probably can never be "free".

I can't remember enough of the economic theory that I once knew, but, because of the high infrastructure costs of being a mobile carrier (barriers to entry), and the fact that there is a finite number of consumers, (or rather, that their is a finite amount of consumer revenue to go fund the system), the mobile carrier market is not what economists would call "perfect". In fact, at best it is an oligopoly, so there is still plenty room for overcharging.

For further reference, I would refer you to an economics textbook, or more appropriately for the readers of this site, Wikipaedia!

@ Ohmz
Yes, Rogers are complete and utter bastards (as I believe Rik would say in the Young Ones).
Here's hoping that the roll-out of 3G by Bell and Telus to replace their CDMA network across this vast nation will provide the competition to make Rogers re-think their pricing.

@ Technology changes, and so should you. Uh yeah, I wouldn't hold my breath. I don't think Bell and Telus will be giving up their three year contracts soon.

A smart man might think there was collusion involved...

Like many many many other iphone 3G owners it looks like I will be picking the best phone on the market when my contract expires in six months. I can guarantee it won't be the iphone 3GS and it won't be on O2.

It will be really interesting to see if there are any queues for the 3GS.

"Finnite amount of consumer revenue to fund the system"? Hello?? Do you realise how many people would give up home broadband entirely if they could have a decently priced HSDPA contract and tethering - or een just use a smartphone?

Teh mobile companies need to focus on making better pipes and better prices, instead of trying to hijack content revenue and monopolise the very handsets that drive incrased system usage - consequentøy reducing their accesibllity and affordability to the mainstream user.

Can't believe O2 retail would lie to customers (not me, a friend and someone else) about getting a free upgrade if they got one now (end of May.

Personally I would get an iPhone but not on O2 as the Data network is of poor quality compared to t-mobile or orange in the areas that I live and work hardly any 3g at all

@BOFH_UK

No not true. o2 have not put the prices by around £100. o2 are giving the same Gb (sized) phone free now as they did before on the same tariffs. I understand Carphone Warehouse was selling the 16Gb model for free, but that was just a end of line discount price. The new 16Gb is being sold at the same price the old 16Gb model was 2 months back, just like everything else is. My point was that everyone is expecting the the new 32Gb to take the old 16Gb price, and the new 16Gb to take the old 8Gb price, just because thats what happened in the US. However even after the AT&T price cut in the US, a 24 month contract still works out over £200 more in total in the USA. So should we not stop complaining that other countries are now getting deals almost as good as us???

I have it on good authority that T-mobile which I am a user will be having the new Iphone 3gs in a couple of months time. I rang up yesterday and they confirmed it....I cant wait

Well written Gordon - you hit the nail on the head !!!

I am still on the 2g phone and wanted to upgrade to 3gs, I am happy to pay for the upgrade, but 02 are not interested in breaking my contract and signing me up for another 18 months, they will give me a month off !!! Stuff them I will not re-sign anither 18 months now and will buy my own phone and terminate with 02 as soon as someone else breaks their monopoly, or someone else brings out a decent phone. O2 are very narrow minded and seem to have upset a large majority of their customers.