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O2 closes in on exclusive deal to sell iPhone in UK

Tom Warren   on 05 July 2007 - 08:19 · 55 comments & 20711 views

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O2 is on the verge of wrapping up a deal to exclusively sell the Apple iPhone in the UK with a view to launching the iPod-based handset by Christmas.

A number of Europe's largest operators have been linked with a deal to sell the iPhone in Europe over recent weeks. It is understood that formal deals are now imminent and that O2 is about to sign a contract to sell the handset in the UK. It is understood that T-Mobile, Germany's largest operator, will sell the iPhone exclusively in Germany, while Orange, France's largest mobile phone company, has won the race to sell the handset in France. The iPhone is due to launch across those territories in November.

There has yet to be official confirmation of any deals and a spokesman for the UK's largest mobile operator said: "O2 has not signed a deal with Apple." None of the mobile phone operators would comment on the process given the complexity of negotiations with Apple.

Competition among mobile phone operators for a deal with Apple has been fierce, with the iPod maker understood to have driven a hard bargain. One source said that securing the most talked about handset of all time on an exclusive basis and making the economics work had proved a tough balancing act.

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#1 Julius Caro on 05 Jul 2007 - 08:21
Interesting. I think when the ipod was announced there were already rumors that it'd be O2 the one to sell the iphone. I think O2 is owned by telefonica, but orange also operates in spain... so I wonder which company will sell it in spain. I'd say telefonica, since it's the biggest mobile operator in spain.
#2 Chrispynutt on 05 Jul 2007 - 08:42
I might be wrong on this, but it might help that O2 are one of the least re-brand heavy of the UK providers. I know Apple would want there phone unsullied by nasty orange/pink/red icons.
(1 reply) #3 TR1GG3R on 05 Jul 2007 - 08:50
hmm so o2 wont be allowed to mess around with the firmwares
#3.1 JamesWeb on 05 Jul 2007 - 08:58
Well obviously, if you so much as go near the firmware the screen will fall off. In the interest of security, of course.
#4 +nezermundy on 05 Jul 2007 - 08:57
I think o2 is the best anyway, there marketing is dam good as well!
#5 John. on 05 Jul 2007 - 08:58
I wanted either O2 or Vodafone, so I'm happy either way.
#6 Lingwo on 05 Jul 2007 - 09:04
cool! my o2 contract runs out in November too, i wonder what i'll upgrade to.
(1 reply) #7 +TCLN Ryster on 05 Jul 2007 - 09:07
Noooooooooooooo! O2 is one of two networks that has rubbish signal where I am (T-Mobile is the other). I was kinda hoping for Vodafone or Orange, but I guess Orange has their SPV range of smartphones so wouldn't want to compete with their own product lineup.
#7.1 furby on 05 Jul 2007 - 13:51
02 has the XDA range so I'm not sure that's a a big uissue. It would be a coup for any of the networks to get the iphone.
#8 PureLegend on 05 Jul 2007 - 09:09
I see. This surprises me. I thought it'd be Vodafone for sure.
(1 reply) #9 Fahim S on 05 Jul 2007 - 09:10
Surprisingly O2 IMHO.
Orange is the biggest operator in France.
T-Mobile is the biggest operator in Germany.
O2 is not the biggest operator in the UK... I would have thought they would have chosen Vodafone or Orange, both of which are 'bigger' than O2.
#9.1 AdmiralRooster on 05 Jul 2007 - 10:29
Top two networks in the UK are technically O2, followed by T-Mobile (most people dont realise that T-Mobile also plays host to numerous Virtual operators, like Virgin, and use thier infrastructure though I guess that doesnt play in here) Vodafone has 16/17m subscribers, T-mobile has 19m and O2 has 24m...

Last edited by AdmiralRooster on 05 Jul 2007 - 10:35
#10 craybox on 05 Jul 2007 - 09:15
our company has been on each of those networks and vodaphone seems to have the best coverage in the UK, we are with t-mobile now and service is fairly poor.
(1 reply) #11 yakumo on 05 Jul 2007 - 09:21
Locking it like this sucks, I thought they were intending to sell them from apple stores, contract free.

O2 really sucks where I live (Oxfordshire) the coverage is appalling, nearly as bad as Orange, compared to full signal practically everywhere with Vodaphone.

I'm not after an iPhone, but removing this choice from the consumer really blows
#11.1 whistlerxp on 06 Jul 2007 - 11:01
If they don't sign an exclusive contract, Apple can't justify leeching money off your contract. I guess it's like a product red phone, except the money goes to Steve and not Bono.
(3 replies) #12 +Xerxes on 05 Jul 2007 - 09:44
So it seems the biggest operator in the region gets the distrubution rights to the iPhone? could be very bad news for Aussies (providing Australia is getting the iPhone at all...) as Telstra is our biggest operator and imagine how much Telstra will charge for it! *gulp* I don't even want to think about it....
#12.1 Samboini on 05 Jul 2007 - 10:20
So don't buy one?
#12.2 +Xerxes on 05 Jul 2007 - 10:25
Quote - (Samboini said @ #12.1)
So don't buy one?

I don't intend to. I was just stating that (as usual) we Aussies will get royally ripped off (again)
#12.3 Kushan on 05 Jul 2007 - 12:07
Quote - (Xerxes said @ #12.2)
Quote - (Samboini said @ #12.1)
So don't buy one?

I don't intend to. I was just stating that (as usual) we Aussies will get royally ripped off (again)


If it makes you feel any better, EVERYONE that buys this phone is getting royally ripped off.
#13 qbie on 05 Jul 2007 - 10:01
They really should go with Orange

How could they miss the marketing opportunity they get from the "Apple and Orange" partnership?

*grin*
#14 Lt-DavidW on 05 Jul 2007 - 10:04
I have a feeling that the iPhone will be a flop in the UK.

Brand-loyalty is not so strong here, even seen as geeky, and current mobile phone manufacturers already have competing phones on the market at half the price of the iPhone.

IMO, it will only appeal to a select few people.
(1 reply) #15 psionicinversion on 05 Jul 2007 - 10:17
i think 02 has the best signal in england compared to other operators and is quite big so the iphone should goto 02. But i agree with Lt-David the iphone wont sell very well here. Ppl are text crazy sending pictures and recording funny vids on there phones to send to other ppl and seeing as the iphone cant do those things ppl will just laugh tell the ppl who try sell it to them to go f**k themselves (we are so polite in england :wink and get someat that can actually do things with.

If ppl do choose the iphone you can guarantee it will be returned within a cpl weeks with lots of complaints that its a big pile of crap basically. Think im gonna go with one of the new nokia Nx series of phones, cus my sis has the N73 or 75 whatever it is and the picture+recording quality on it is amazing. Id prolly get the N95 or whatever.
#15.1 yakumo on 05 Jul 2007 - 10:56
As i said earlier, O2's signal strength in all of Oxfordshire is terrible, don't assume somethings the best in the country just because it's good in your tiny area of observation.

Last edited by yakumo on 05 Jul 2007 - 11:07
#16 randomnut on 05 Jul 2007 - 10:28
I cant see the iphone selling too well in england either. People here arn't sheep like those in other countries, probably because we get ripped off with our prices so a bit more thought goes into what we waste our money on. Besides, the N95 is far too big over here at the moment, especially as its free on a contract so that will win hands down.
(7 replies) #17 creamhackered on 05 Jul 2007 - 10:49
The majority of the UK aren't stupid enough to pay £300 for an under spec phone
#17.1 lunamonkey on 05 Jul 2007 - 11:07
They'll offset the cost with the contract tho. It'll be "free" on some packages.

Who pays for phones in the UK these days?
#17.2 Lt-DavidW on 05 Jul 2007 - 11:13
I do. There is no way I spend £35 per month on PayG.
#17.3 dissonation on 05 Jul 2007 - 11:58
Quote - (lunamonkey said @ #17.1)
They'll offset the cost with the contract tho. It'll be "free" on some packages.

Who pays for phones in the UK these days?

Did you not read "The handset is likely to cost around £400 on top of signing a long-term contract with the mobile operator, as it will not be subsidised as is standard in the UK market."
#17.4 Julius Caro on 05 Jul 2007 - 12:24
I believe it will not be "fully" subsidized. If it isn't subsidized at all I fail to see why apple wouldn't sell the damn phones unlocked
#17.5 JamesWeb on 05 Jul 2007 - 13:15
Quote - (lunamonkey said @ #17.1)
They'll offset the cost with the contract tho. It'll be "free" on some packages.

Who pays for phones in the UK these days?


I doubt it, I'm sure the US have contracts where you get free phones, but not in the case of the iPhone. In the US you choose your tariff in iTunes, and no doubt Apple will have it the same way in the UK, so you'll have paid full price for the ridiculous thing before you've even chosen a contract of any price.
#17.6 lunamonkey on 05 Jul 2007 - 13:36
Quote - (dissonation said @ #17.3)
Did you not read "The handset is likely to cost around £400 on top of signing a long-term contract with the mobile operator, as it will not be subsidised as is standard in the UK market."


"likely"...

Someone will, within a month, have it cheap on a (hign end) contract deal. It will end up costing the customer the same in the long run, but there will be ways of getting it on Pay Monthly.

..or I'll eat an iPhone
#17.7 Should-have on 06 Jul 2007 - 23:29
Quote - (Lt-DavidW said @ #17.2)
I do. There is no way I spend £35 per month on PayG.


Since when does anyone pay anything monthly for PAYG?
(1 reply) #18 Zoom7000 on 05 Jul 2007 - 11:28
Can you just not just buy the phone sim free? I mean, I already have an O2 contract. If I wanted to get the iPhone, why would I want to buy another? OK, they may give me an upgrade option.

But for people who haven't got O2 contracts, why can't they just buy the phone sim free? Why does it have to be sold with a contract?

I think they'd get a lot more sales this way...
#18.1 Ruciz on 05 Jul 2007 - 16:08
Quote - (Zoom7000 said @ #1
Can you just not just buy the phone sim free? I mean, I already have an O2 contract. If I wanted to get the iPhone, why would I want to buy another? OK, they may give me an upgrade option.

But for people who haven't got O2 contracts, why can't they just buy the phone sim free? Why does it have to be sold with a contract?

I think they'd get a lot more sales this way...


Likely you can, if you go shell out another contract renewal and pay to get the hardware upgrade (HUP), as if you havn't been with them for at least 5 years your HUP term is liklely the length of your contract. Least how it is in Canada. With Rogers I qualify for a HUP Every 18 months if I resign a 36 month contract... But if they discount the iPhone is yet to be disclosed. Apple has always been big on huge retail pricing with no drop for quite some time.

Providers may offer an iPhone package for $100 a month or something, gives you the iPhone, data and voice pack all in one 'reasonably' priced bill (yeah, right)
#19 vipwoody on 05 Jul 2007 - 12:06
£400? lol thats a rip off! about 800$ and it costs 500~600$ in USA.
(7 replies) #20 Kushan on 05 Jul 2007 - 12:12
One day, Apple's arrogance will be the end of them. It cost Sony dearly, but at least when you fork out £400 for their system, you actually get top of the range hardware. The iPhone would have been a good phone maybe 3 years ago, but for that price I can get the latest and greatest technology twice over.
The European Phone market is years ahead of the US. Apple might get away with a lacklustre phone there, but I doubt they'll get away with it here.
#20.1 LTD on 05 Jul 2007 - 13:15
Right now, Apples "arrogance" is churning out the most desirable products in the industry.

If you WANT them to fail because you have some moral compunction with what they're doing, please let us know so we can ignore you in the future.
#20.2 Kushan on 05 Jul 2007 - 13:48
Quote - (LTD said @ #20.1)
Right now, Apples "arrogance" is churning out the most desirable products in the industry.

If you WANT them to fail because you have some moral compunction with what they're doing, please let us know so we can ignore you in the future.


Did I say that I WANTED them to fail? No, I just pointed out that Apple is incredibly arrogant, arrogant enough to charge people ridiculous amounts of money for a lacklustre phone (not to mention the additional "services" and battery changes), arrogant enough to have most of Europe's Phone companies out rightly say that their demands are wholly unreasonable, arrogant enough to not even bother developing a proper SDK for the thing.

I'm sorry if you can't face that fact, but it's the truth - Apple is milking everyone who buys or licenses their products for as much as they can. They don't care about you, they don't care about offering the best product possible, they just care about making as much money as possible and are more than happy to let their legions of fanboys and misinformed "geeks" give it to them.

I mean tell me, what makes the iPhone so special, apart from the Apple logo?
#20.3 draklin on 05 Jul 2007 - 15:44
Quote - (Kushan said @ #20.2)
I'm sorry if you can't face that fact, but it's the truth - Apple is milking everyone who buys or licenses their products for as much as they can. They don't care about you, they don't care about offering the best product possible, they just care about making as much money as possible and are more than happy to let their legions of fanboys and misinformed "geeks" give it to them.


Please name a for profit company that ISN'T out to make as much money as possible. The law of the land is make the most amount of money with the least amount of work.
#20.4 Fubar on 05 Jul 2007 - 16:28
Quote - (draklin said @ #20.3)
Quote - (Kushan said @ #20.2)
I'm sorry if you can't face that fact, but it's the truth - Apple is milking everyone who buys or licenses their products for as much as they can. They don't care about you, they don't care about offering the best product possible, they just care about making as much money as possible and are more than happy to let their legions of fanboys and misinformed "geeks" give it to them.


Please name a for profit company that ISN'T out to make as much money as possible. The law of the land is make the most amount of money with the least amount of work.


Virgin Enough Said
#20.5 Lt-DavidW on 05 Jul 2007 - 22:24
Quote - (Fubar said @ #20.4)
Virgin Enough Said

Bwahaha! So it was in their customers' best interests that they sacked half of the UK-based technical support agents, outsourced it to India, cut channels, started capping broadband, and raised prices? It had nothing to do with saving money, eh?
#20.6 Fubar on 06 Jul 2007 - 07:52
Quote - (Lt-DavidW said @ #20.5)
Quote - (Fubar said @ #20.4)
Virgin Enough Said

Bwahaha! So it was in their customers' best interests that they sacked half of the UK-based technical support agents, outsourced it to India, cut channels, started capping broadband, and raised prices? It had nothing to do with saving money, eh?



that was before virgin media took over if you do your research and im talking about Virgin NOT virgin media
#20.7 Lt-DavidW on 06 Jul 2007 - 08:28
Quote - (Fubar said @ #20.6)
Quote - (Lt-DavidW said @ #20.5)
Quote - (Fubar said @ #20.4)
Virgin Enough Said

Bwahaha! So it was in their customers' best interests that they sacked half of the UK-based technical support agents, outsourced it to India, cut channels, started capping broadband, and raised prices? It had nothing to do with saving money, eh?



that was before virgin media took over if you do your research and im talking about Virgin NOT virgin media

fair enough, my apologies
#21 Julius Caro on 05 Jul 2007 - 12:22
They don't really NEED to strike exclusivity deals in Europe. And if there's no 3G support, I dont know what the point is. I believe the iphone is really expensive and if apple doesnt get a deal with an operator nobody would buy them over the actual cost price


Next thing we know, european iphones will also have an activation process we'll be charged for. I bet they'll charge europeans for something we were never charged before.
#22 azz0r_wugg on 05 Jul 2007 - 12:39
Good. I left 02 a while back because of there ridiculously expensive data transfer rates. There was no point getting an n95 if I was limited to 3mb a month!

So I switched to t-mobile, got web and walk and an 18 month contract with a chance to upgrade my handset in 6 months if I want.

Kicks ass.
#23 FloatingFatMan on 05 Jul 2007 - 14:16
This does raise an interesting question. Why would Apple sign with a company who cannot service the iPhone's data connections? O2 have no EDGE support in the UK; they have GPRS and 3G. Free WiFi is virtually unknown except for the people who don't know how to lockdown their home routers; so why would Apple sign to a provider where part of the phones capability is crippled?

This *could* indicate some hardware changes for the EU version, such as 3G.

There's also the fact that the UK mobile market is crazy on MMS messaging, IM messaging, and video recording. The three top features the phone doesn't support.

Either changes happen to the iPhone before UK launch, or they're going to have a hard time matching US sales.
#24 SHADOW-XIII on 05 Jul 2007 - 15:10
oh no, O2 is, I think, the most expensive operator in UK.
oh well I wasn't going to buy it anyway
#25 Groovedude on 05 Jul 2007 - 15:40
yes o2 are not value for money...
(1 reply) #26 bucko on 05 Jul 2007 - 16:11
I use O2 Pas you go since all my family are on it.

If Iphone can offer a decent contract or cheaper model then it may tempt me a little more.
#26.1 SHADOW-XIII on 05 Jul 2007 - 20:05
Quote - (bucko said @ #26)
I use O2 Pas you go since all my family are on it.

If Iphone can offer a decent contract or cheaper model then it may tempt me a little more.
did the same until 3 gave me 500 free minutes for 15pounds a month ...
(1 reply) #27 Yazoo on 05 Jul 2007 - 17:44
I'm happy its O2 Vodafone are the worst operator of the lot in the UK IMHO. Also they heavily brand all their phones in firmware and on the phone itself, Orange come a closed second.
#27.1 +TCLN Ryster on 06 Jul 2007 - 22:59
Apple doesn't allow branding of the iPhone if I remember correctly, so that point about Vodafone and Orange is irrelevant. In fact I think I remember reading that they dont allow operator modifications of any kind.
#28 guruparan on 05 Jul 2007 - 20:12
I saw the HTC Touch phone in our local store (in chennai, India)!! which is pretty great compared to iPhone with extended features like video recording, mp3 ringtone & esp its win mobile OS that allow lot of apps to be installed.

Many people where learing about iPhone now..but when they (& me too) saw HTC phone, we were really amazed. So it is just around Us $ 450 (Converted the rate). ( + no contracts or a pre defined operator!

Anyhow iPhone is cool too...
#29 Croquant on 05 Jul 2007 - 20:27
Yeah, now Apple can reel in lots of British suckers too!
#30 +TCLN Ryster on 06 Jul 2007 - 23:00
I dislike Apple as much as the next man, but I have to hand it to them... they do know how to market their products and make them seem "cool".

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