O2 Bends over for iPhone

O2 has been confirmed as the sole network for the iPhone, with Carphone Warehouse the only independent retails. To secure the deal, O2 supposedly agreed to hand over 40% of revenues.
 
The iPhone is coming, and it’ll be here on November 9th.

O2 were chosen amongst the networks to be the exclusive operator to supply the iPhone. Some reports say the Telefonica owned network nicked the deal at the 11th hour by agreeing to give Apple 40% of its iPhone associated revenue. A huge increase on AT&T’s 10% deal in the States.

The handset will cost £269 for an 8gb model, with an 18 month contract starting at £35 per month, although this includes unlimited data usage.

Users will also get free WiFi access from 7500 hotspots provided by the Cloud.

Commenting on the price tag, more expensive than its Amercian counterpart,  Steve Jobs, the chief executive of Apple, maintained that it was fair. “It is three awesome products in one. It’s a breakthrough phone, leagues different from what you can do today, and it is really easy to use,” he said at Apple’s main store in London. “Sometimes you get what you pay for.”

The handset cost more in Britain, he said, because of VAT and because it was “a little bit more expensive to do business over here”.

O2 are being criticised from all corners for taking on the iPhone. Having spent huge amounts of money on 3G licences, the iPhone does not use 3G and uses the slower ‘2.5G’ Edge technology.

O2 is having to upgrade their network to be Edge compatible, and will only have 30% coverage in time for launch, the cost of which is likely to be in the millions if not tens of millions of pounds.

Jobs confirmed Apple is working on a 3G version for late next year. Introducing one now, he said, would have compromised the long battery life.

O2 are also banking that the iPod Touch won’t affect sales. The touch, announced earlier this month, is essentially an iPhone without the phone, and a large percentage of users in the US bought an iPhone for the upgraded iPod experience, something UK users won’t be doing thanks to the touch.

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