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O2 has beaten its rivals to win the exclusive UK rights to offer Apple’siPhone. The tie-up, the mobile phone industry’s most sought-after deal inyears, marks a major coup for the 18 million-customer group. The finalcontract is expected to be signed imminently. The phone, which should be on sale in time for Christmas, is expected to provea key weapon in enabling O2 to win and retain customers in one of Europe’sfiercest mobile markets. It is understood that negotiations are continuing with mobile phone retailersincluding Carphone Warehouse over an agreement to sell the iPhone in theirstores after a period of exclusivity with O2.
According to the Financial Times Deutschland,German operator T-Mobile has succesfullybroaked a distribution agreement for Austria, Croatia, Hungary and TheNetherlands. Earlierreports already claimed that T-Mobile had reeled in the German contract,with O2 offering the iPhone in the UK andOrange securing the rights for France. According to the Financial Times report, the deal will offer Appleconcessions previously unheard of amongst handset makers. In addition to revenue from the sales of the iPhone itself, Apple willreceive a ten per cent cut of the device's subscription and usage fees. Apple is believed to havesimilardeals on the table with its other European providers and with US carrier AT&T. The report comes just one days before Apple is expected to reval its finalplans for a European iPhone rollout. The company has scheduled a specialmediaevent in London on Tuesday and the Financial Times reports that DeutsheTelekom will hold its own press conference on Wednesday in Berlin.
The Independent wrote:
Today's launch is part of a concerted attempt by Apple to break intothe European mobile phone market. The iPhone, which will also be soldby Orange in France and T-Mobile in Germany, is expected to go on salealmost immediately, and industry experts predict that it will be pricedinitially at £269 ($399), the same as the iPod Touch is being sold foron Amazon. More than 270,000 were sold in the first 30 hours of itsrelease in America, where some Apple fanatics queued for more than fivedays in anticipation. Not all were pleased, however, by a price cutthat sees the 8GB machine on sale at a huge reduction on the initialprice of $599. After widely publicised online protests threatened todamage Apple's reputation, Mr Jobs wrote an open letter to customers,offering a $100 rebate to those who had paid the higher price. There was some speculation yesterday that O2 had paid too high aprice for exclusive rights to the franchise in Britain, with rumoursthat they would be forced to give Apple up to 40 per cent of revenuesfrom use of the iPhone and an agreed margin on the retail price. Appleis thought to have demanded that the iPhone be sold through TheCarphone Warehouse because of fears that O2 did not have a sufficientlylarge presence in the UK. A further source of concern for O2 will be the release on 5September of the iPod Touch. The sixth generation of the iPod will beavailable in the UK before Christmas, and some experts are warning thatthe similarities between it and the iPhone will dampen demand for thenew product. The two machines both have touch-screen and wi-ficapabilities, and are almost identical in size. Vodafone had been expected to win exclusive rights to market theiPhone, but O2 poached the business at the last minute. The deal wasfinally secured after Mr Jobs received a visit from Cesar Alierta, theboss of Telefonica, which bought O2 two years ago.
PCWorld wrote:
In the U.K., The Guardian claims O2 finally secured a last minuteexclusive on the iPhone by agreeing to give Apple 40 percent ofiPhone-generated revenue plus a percentage of the sale price, promptingone analyst to characterize the deal as "madly money-losing." Original plans had been for Orange and O2 to share the device, on account of the U.K.'s more fractured mobile phone market. Carphone Warehouse has also been signed up as the sole independent distributor of the product, other than Apple and O2. Apple'snegotiating techniques have been called into question, this reportclaims: "Throughout discussions over marketing the iPhone in Europe,Apple has played off the UK's four main networks - O2, Orange, T-Mobileand Vodafone - against each other. All of them, at one stage, believed they had an exclusive deal for the British market."
9.06am - O2 Online store down 9.00am - 1 hour to go… 8.43am - Good morning and welcome
Last edited by Editorial Team on Tue Sep 18, 2007 3:37 am; edited 1 time in total
9.25am - Look like there might be AN iphone in a grey case thats just arrived
9.23am - The iPhone Guy from the tutorials has just turned up
9.06am - O2 Online store down
9.00am - 1 hour to go…
8.43am - Good morning and welcome
Musicis barely audible over the buzz of the crowd... could be amariachi bandcould be U2. Feels a bit surreal having an Apple pressevent in an Appleretail space: black shirted Apple mafia areeverywhere.
Here we go... Steve stands up, welcomes everyone. And he dives rightin: the iPhone has been announced for the UK! "We picked the best one,the most poplular carrier, it's O2. We've since lowered the price ofthe US phone of the 8GB phone, in the UK the price of the iPhone is£269 including VAT."
It goes on sale November 9. "We've been thinking about what kind of ads to run for the iPhone, we need to get out of way and let the iPhone speak for itself." They've got a version in the UK: "Do you want to see them?" Applause. ... aaaand they're the same ads as the US, just with British voiceover. Rad.
-Exactly the same as a matter of fact. The same first three ads we saw in the US only showing The Guardian instead of the New York times, and, of course, the O2 logo. Applause again after seeing all three ads.
"We got to pick the carrier that felt most like home, and that's O2."
What about the "02" at the millennium dome? Cool Apple events there now?
3G Excuses... The 3G chipsets are real power hogs. Handset battery life cuts power to 2-3 hours." Yeah yeah, we've heard it before. "Our phone has a talk time of 8 hours and that's really important when you want to use your phone for internet and music.
3G needs to get back up to 5+ hours, something we think we'll see later next year. ...
WiFi is way faster than any 3G network. Energy efficient EDGE with better, faster WiFi. That's why we chose it."
Cloud is the WiFi provider, and yes, it's free." Steve goes on to again tout the advantages of WiFi... only 7500 though!
10:16 - Steve gets back on stage for Q&A. We ask: Why not 3G networks?
Steve: "The 3G chipsets are real power hogs. Handset battery life cuts power to 2-3 hours." Yeah yeah, we've heard it before. "Our phone has a talk time of 8 hours and that's really important when you want to use your phone for internet and music. 3G needs to get back up to 5+ hours, something we think well see later next year. ... WiFi is way faster than any 3G network. Energy efficient EDGE with better, faster WiFi. That's why we chose it."
10:19 - Q: 7,000 hotspots in the UK... but are they free?
Matthew: "Cloud is the WiFi provider, and yes, it's free." Steve goes on to again tout the advantages of WiFi. Matthew nodding head vigorously, "It's a lot faster."
10:21 - Q: Is the same deal with Starbucks coming here? [Here being the UK, obviously.]
Steve: "You'll have to ask Starbucks about that. They love the UK." Smiles.
Q: What about iTunes activation?
Steve: "Yes, iTunes will work in the UK like it does in the US, allowing you to select your plan and then activate your phone. Of course, it also allows you to update your phone."
10:22 - Q: What's the purple icon we saw?
Steve: "That's the iTunes WiFi Music Store, coming this month to the UK."
10:24 - Q: What's the contract length, and does unlimited usage truly mean unlimited?
Matthew: "18 months contract. There is a limit: 1,400 internet pages per day would break the deal as part of fair usage agreement." Wait, what?
Q: What's the revenue sharing from data and device sales between Apple and O2?
Steve: "Unfortunately, we're not going to go into that, but good question!" Laughter. "...Sometimes you get what you pay for."
10:26 - Q: Is unlocking a concern?
Steve: "It's a constant cat and mouse game -- we have the same thing with the iPod with music." Steve looks at Matthew, "Are we the cat or mouse?" 'We have to stay one step ahead of them."
Q: To Matthew, what do you have to do to get your network ready for the iPhone?
"We're investing in EDGE. As many people have noticed, hey I have EDGE! By launch we'll be north of 30% and build from there." Only 30% folks. It's important to remember that many parts of Europe doesn't use EDGE, they've often moved on to UMTS (i.e. 3G)!
10:30 - Q: Were you aware that the iPod touch was coming out when you were negotiating the iPhone deal?
Matthew: "One of the great things about working with Apple is they are always moving forward." Yes, and one of the great things about O2 is how it dodges questions. Steve: "Well, one's a phone, and one's not. The iPod touch is training wheels for the iPhone."
Q: How many [iPhones] do you hope to ship before Christmas?
Matthew: "80% of high end customers from other networks would be willing to switch carriers based on their data." But he won't discuss specific sales numbers.
10:32 - Q: What are your plans for iPhone launch in Europe, and your reaction to upsetting other carriers who feel played-off in terms of not getting this deal?
Steve: "We said we'd be in a few countries in Europe and we still plan to do that. As to the carriers, we took the approach to see who would be the best fit -- it's like going out on a few dates before getting married. So yeah, we have a few upset girlfriends out there." Laughter.
10:35 - Q: Can you be more specific about other European countries? [You know you're talking to Steve "Stonewall" Jobs, right?]
Steve: "We're here to talk about O2 UK, and that's all we're willing to talk about today."
Q: Why not one single European carrier if O2 is such a good fit?
Steve: "We were faced with lots of decisions to make and we think we've made the right decisions. We certainly have with O2."
10:35 - Q: Can you be more specific about other European countries? [You know you're talking to Steve "Stonewall" Jobs, right?]
Steve: "We're here to talk about O2 UK, and that's all we're willing to talk about today."
Q: Why not one single European carrier if O2 is such a good fit?
Steve: "We were faced with lots of decisions to make and we think we've made the right decisions. We certainly have with O2."
10:37 - Q: Have you thought about opening the iPhone to 3rd parties?
Steve: "Yes, we've already done that with Web 2.0. We're looking at more intimate apps. But people hold their phones to a higher standard than their PC. The more open you are, the less predictable." Again, same ol' same ol'.
10:37 - Q: £900 for 18 months on up to £1260. Any assurance you won't slash the price by 1/3rd? (Laughter.)
Steve: "I don't think that's going to happen. But this is technology so you never know. We have no plans to change the pricing, but we guarantee it will change in the future just like all technology products. We're working on the next iPhone and the next one after that. That's what our customers expect."
Q: Do you feel a 2 megapixel would be a concern to European customers?
Steve: "No, the camera is great. More megapixels don't make a better camera, the iPhone is actually a great camera especially, with great lighting." Ok, sure, but isn't every camera a great camera if the subject is well lit?
10:42 - Q: Unlimited data packages: will those go to other contracts as well?
Matthew: "On 1st October we'll be rolling those out for all out customers."
Steve: "It's the future."
Thats it! We're off for a coffee, and the 02 iPhone is here!
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Apple events there now?
