Why the iPhone will fail in the UK

Today Steve Jobs (CEO Apple, Inc) along with Mathew Key (CEO o2) launched the iPhone onto the British market, well, sort of. You see you'll actually have to wait until November 5th to buy one.

The iPhone will cost British consumers Â£269 ($536 USD) on an eighteen month contract, starting at Â£35 per month with unlimited data (I'd guess a fair usage policy would be in place).

If we take a look at the UK mobile phone market at the moment most phones are free on a Â£30 and upwards monthly contract, including the Nokia N95 (Â£499.00) which is a very powerful smart phones and includes a 5 Mega pixel Camera, wireless internet and integrated GPS (to name but a few features).

It comes down to the UK population not being used to paying for the phone on a 18 month contract. Many people will shun the iPhone due to the price alone. British consumers are a lot more frugal than their American counterparts and would do their research before buying an iPhone and would actually tot up the costs before hand.

Mobile web usage is not big in the UK and although it has increased over the past few years, it's mainly used by power users with smart phones and PDA's. This could change with o2 giving all of it's customers (signed up to a data plan) unlimited usage (fair usage policy will probably apply) however at the moment it is seen as a useless by most consumers (hopefully this will change).

Many people in the UK have reservation with 02 as a mobile phone network, o2 has constantly had higher contracts than competitors (T-Mobile, Orange, three) as well as having strange mobile phone contracts and data plans. Many people see them as inexperienced in this field unlike T-Mobile who have the most experience when it comes to data plans and competitively priced mobile phone contracts.

So to recap, I believe that the iPhone will fail in the UK, because:

UK consumers (in general) do not normally pay for the phone on a contract.
iPhone's competitors have more advanced features and cost less (Nokia N95).
Mobile web usage has not been widely adopted in the UK (yet).
o2's contracts are overpriced (in comparison to competitors)
o2 has little experience in providing data plans to customers.

Sure... though I do think 02 was the best choice for Apple - culture wise they are perfect, what with "The 02" coming soon, and also they have good and long standing infrastructure. They have also been providers of PDA and smart phone services from the pioneet stages. And remember, I did say it would be 02 a while back

despite you saying it would be T-Mobile

haha!

There are people willing to pay for what you get, and those who have iPhones, are not really all too dissapointed in the US, so we'll have to wait and see. I'm not sure it will be an all out failure, though it certainly won't attract the casual phone user, then again i'm not sure it's meant too, so i is targetting, in media speak, "yuppies", or asiprers, not mainstreamers or the average consumer, and from a marketing perspective, not a business user anyway. In that sense, it will probably bring the same success the iPod 80GB Video had, to the phone industry. We just have to wait for an iPhone Nano kind of device, for now.

I'm pleased to see 02 get the contact really, as there are good people behind them, and realistically, they are culturally... "cool" to team up with Apple.

I posted the tarrifs in my topic reporting from Regent STreet 10am today:
http://www.ivirtuaforums.com/apple-iphone-uk-release-live-coverage-t11448.html

Tariffs: