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O2 Gives 40% Revenue To Apple For iPhone

Gordon Kelly


O2 Gives 40% Revenue To Apple For iPhone

We know all the nitty gritty officially comes out tomorrow but today The Guardian is reporting to have the inside scoop of the lengths O2 went to secure the world's most talked about handset.

If the report is to be believed - and that's a big if even at this late stage - O2 became so obsessed with landing the iPhone that it has agreed to give Apple as much as 40 per cent of any revenue it makes from customers use of the device. Note, that's not profit, that's revenue...

Allegedly described by one rival network as "madly money-losing" the deal (similar in structure to the one inked by AT&T in the US) could turn the mobile industry on its head as manufacturers of high end handsets decide they also want a lot more than volume orders for their flagship models. Furthermore, how this will affect customer contracts and pricing is unlikely to be positive...

Anyway, back to the matter in hand.

According to the left of middle-ish daily, bidding for the iPhone was so intense that at one stage or another virtually all UK networks thought they had agreed a deal - hence the constantly changing speculation? Indeed it is said that contracts were even signed by Orange and T-Mobile UK suggesting an unparalleled level of chaos behind the scenes (and the reason for such a long delay?).

So how will this hit customers? What will the length of an iPhone contract be and how much will be required upfront? Won't it simply be easier to buy an iPod touch and keep a small, basic handset on a reasonable price plan in our pockets instead?

Convergence. Progression or obsession? You, as always, will decide...

Update: Carphone Warehouse will also allegedly be in on the act with official iPhone/O2 retailing. So now just a wait for the predictable announcement...


Guardian Story

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