Apple iPhone & 02 - First take

Thomas Husson | September 18, 2007, 06:38 AM

So, it is now official. o2 will be the exclusive operator to distribute the iPhone in the UK, from November 9th onwards.

Despite 02's acquisition of The Link high-street stores last year, the iPhone will also be available exclusively at Carephone Warehouse, to make sure the coverage is exhaustive.

Apparently, there is no major difference in the European version of the phone. A new device more adapted to Europe is now rumored for 2008. There is no 3G, but the phone will work on the EDGE network (often referred to as 2.75G even though the speed and latency are not that great). My understanding is that it is less battery-consuming and that the gap is not really between EDGE and 3G R99 but with HSPA. However, the coverage is expected to be around 40% of the UK population, much lower than what is currently available in France for example. That shouldn't necessarily be a problem for the early adopters who will be spending GBP 269. Some of them may live in more rural areas but I guess most of them would be living in larger cities. In addition, Apple has a deal with the Cloud for seamless wifi roaming to be offered for free to iPhone owners.

o2 is finally launching voice+flat-rate data tariffs: £35 (50 euros), £45 (65 euros) et £55 (80 euros). This seems quite expensive all the more as you apparently have to subscribe for 18 months on top of a 400 euros handset. Last time I walked in Oxford Street, I could find a N95 for GBP 120 under the same conditions and even for free in some cases with an equivalent lock-in period if I remember well...I insist on "finally" because other UK operators have already launched such data tariffs while o2 remained more expensive. O2 will be offering same/similar unlimited data plans on other tariffs too, which will help to unleash use on the mobile Internet.

In an article published yesterday, the Guardian indicated that "02
is understood to have agreed a margin on the retail price - to be confirmed tomorrow - but will return to Apple as much as 40% of any revenues it makes from customers' use of the device". Apparently this has not been confirmed today and seems anyway mad to me.

Inversely, my colleague Ian Fogg asked about a potential revenue share from Apple to mobile operators (not the other way round which most people think about). There was no precise answer but it was considered as conceptually possible. This would be especially relevant as the current buy from iPhone iTunes store refuses to work on edge/gprs, and insists on using wifi.

According to Les Echos and La Tribune, Orange France has not officially confirmed to be the iPhone reseller in France, but this should only be a question of days. The device is expected end November. Interestingly, according to the French law, the operator has to offer an unlocked version of the phone. If it is not subsidized, then I am not sure what prevents me from using it with SFR or Bouygues (not to mention the free unlocked codes available on the Internet via hackers...) ?

Anyway, another interesting point for the operators owning the exclusivity (also T-Mobile for Germany / Austria / Netherlands and Hungary ?) is the traffic it will drive into their shops. At the end of the day, if you come to an Orange shop to buy an iPhone but that you leave it with a Nokia or a Samsung, isn't that a nice acquisition tool?...

Updated: I am still sticking to my initial comments here (even though Apple seems to be much more disruptive in the ecosystem than expected) and here. In the meantime, I had a brief opportunity to play with it. This is definitely a stylish and design device. Not the most performant. But hey, it's Apple...

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