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O2 Confirms iPhone 3G Exclusivity

Gordon Kelly


O2 Confirms iPhone 3G Exclusivity

So the 'iPhone 3G' ultimately feels more like a mod where a hacker has stuffed in a 3G chip and basic GPS and been forced to bend a plastic back around the extra bulk, but what about the positive network news... oh.

Sadly, unlike many other countries, UK dwellers will once again be restricted to O2 should it wish to snap up Apple's improved, if incremental, upgrade. Matthew Key, chairman and CEO of O2 owner Telefónica Europe confirmed "The iPhone has been a phenomenal success for us. We look forward to offering an ever better iPhone 3G experience exclusively to our customers in the UK and Ireland."

Thankfully then we know Steve Jobs has promised to restrict 8GB iPhone 3G pricing to a $199 (£101 equivalent) in every country. Whether the same will be true of the 16GB iPhone's $299 (£162) RRP is as yet unknown. The notion of two year contracts to subsidize the new handset could be a distinct possibility, but for everyone's sake we hope it sticks to 18 months max otherwise we're all off to Zibri again.

So while the iPhone 3G may have lost some of its premium status and underwhelmed on launch the new midrange price means it is still likely to be incredibly popular. Furthermore, with Jobs' claiming 6m phones have now shipped worldwide (many no doubt unlocked) it could well be in line to hit its 10m end of year target.

If only it hadn't scaled down its ambitions quite so much to achieve it...



The Pope

June 10, 2008, 4:03 am

Now that's gonna spoil quite a few people's cornflakes in the morning :(

gary gatter

June 10, 2008, 4:14 am

I think iphone users eat granola ;-)


June 10, 2008, 10:52 am

I live in a village (pop. 1500) and we don't have decent O2 reception. We only get T-Mobile and Orange. Looks like we remain an iPhone free zone.

Anthony Armstrong

June 11, 2008, 9:56 pm

So hot was the iPhone when Apple launched it last year that, in exchange for exclusive rights, network operators agreed not only to sell it at a high price, but to hand over a share of their user revenues as well. The normal tactic of mobile operators, however, is to subsidise the handset in order to attract high-spending customers. The iPhone may be flash, but it has struggled to compete with other handsets that are given away at no upfront cost.

That is a pity because mobile phone subsidies are inefficient. They prompt customers to change their handset every couple of years, when they come to the end of a contract, which has an economic cost. The constant churn in handsets also makes it harder to design new applications to run on them.

Perhaps Apple missed an opportunity: had it sold iPhones with no link to a network contract then the cycle of subsidy might have been broken. But that was always a long shot in a fiercely competitive market. The question now is which will bother the iPhone&#8217s painfully cool users more: that they had to pay a fortune for the gadget, or that, with subsidies, the general public may start to buy them as well.


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