O2, Carphone clinch UK iPhone sales deal

LONDON - O2 UK, part of Spanish telecoms giant Telefonica, and European mobile phone retailer Carphone Warehouse have clinched the long-awaited deal to bring Apple Inc’s prized iPhone to Britain.

By (Reuters)

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Published: Tue 18 Sep 2007, 4:53 PM

Last updated: Sat 4 Apr 2015, 11:41 PM

The phone, which combines its popular iPod music player, a video player and Web browser, will be sold through O2, Carphone Warehouse and Apple stores in Britain for 269 pounds ($536) from Nov. 9.

After months of speculation that O2 had won the deal Apple finally confirmed in London on Tuesday it had chosen the largest British mobile phone operator as its distributor.

Apple is also expected to hand a German iPhone distribution deal to Deutsche Telekom’s T-Mobile and a French deal to France Telecom’s Orange later this week.

The deal with O2 was described as exclusive and ‘multi-year’. Customers will sign up for an 18-month contract on a tariff of either 35 pounds, 45 pounds or 55 pounds, said Matthew Key, chief executive of O2 UK.

Shares in Telefonica were up almost 1 percent at 18.9 euros while shares in Carphone were down 0.3 percent at 3.49 pounds.

Steve Jobs, the Apple chief executive who helped found the company in the 1970s, has staked his reputation on the second-generation (2G) phone and music player catching the imagination of customers in the same way his iPod has.

But although iPhones flew off the shelves when they first went on sale amid much fanfare in the US in late June Apple slashed the price of its $599 model to $399 last week, sending its stock falling on market concerns that sales were slowing.

Jobs attempted to calm angry customers who had paid the top price by offering them a $100 store credit. A few days later, the company announced it had sold a million iPhones in the United States—ahead of its end-September target.

CCS analyst Ben Wood said the long lead-up time until November 9 would allow all the companies involved to ‘whip up a frenzy of demand’.

‘As expected the iPhone is the same device as in the U.S.. It won’t support 3G but that doesn’t matter to the users who will buy it as a fashion item and status symbol.’

Analysts have said the iPhone marketing campaign will raise awareness about extra features in all phones.

O2 rival Vodafone last week unveiled a new handset range, including an ‘all you can eat’ music download service, for the key Christmas trading quarter in a move seen by analysts as an attempt to steal iPhone’s thunder.

Meanwhile handset maker Nokia last month unveiled a rival to Apple’s iTunes music store as part of an overhaul that will see the group break deeper into the online services market.

Vodafone, the world’s largest cell phone group by revenue, has said simply that it is ‘looking forward’ to a faster third-generation (3G) version of the iPhone—something analysts are not expecting until next March.

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