The Observer reported on Sunday that O2 is “racing to sell iPhone [3G] as new model looms”.
In context, MacRumors Buyer’s Guide currently says “Don’t Buy!” against the current iPhone. This is because it’s fairly certain that one or more new models will be announced by Apple at the World Wide Developers’ Conference on June 8th. The question is whether O2 will still be the sole carrier for the iPhone in the UK.
As The Observer’s article (1) noted:
O2 has refused to comment on the length of the “multi-year” deal it signed with Apple in the summer of 2007, but it is understood to have contained a two-year break clause.
Clearing stock and locking-in
Recently, O2 has been pushing iPhones as upgrades to existing customers and is now offering “cheaper” iPhone tariffs on 24 month contracts (2). Incidentally, would you want to be stuck with a phone for two years? That’s an eternity in the life of smartphones. But I know plenty of people who use old phones and are perfectly happy with them.
Anyway, it certainly seems that O2 are clearing stock before a new model is introduced in June or July. But are they also trying to lock customers in before they lose their exclusivity deal? And will they let existing iPhone 3G customers upgrade early as a means of keeping them for another 18-month contract?
The only thing that’s certain at the moment is that it’s going to end at some point. When it does, one or more operators will also start selling the iPhone in the UK. All of the other main carriers (T-Mobile, Vodafone, Orange, 3) have deals to sell the iPhone somewhere in the world, and I’m sure are eager to add Apple’s phone to their offerings.
Other possibilities
Could we see the iPhone sold unlocked and without contract? Play.com has some grey-ish market unlocked iPhones for sale in the UK, but you can already buy unlocked devices direct from Apple in Hong Kong, for example (3). The main problem with this is the high upfront cost or purchasing the device.
Or is there a chance of a real curve ball – Apple seting up as a MVNO? This would enable them to sell a contract, amortising the initial cost of the phone in order to attract customers. There was a very interesting piece on The Register the other day which contained details of Vertu (Nokia) and Dell setting up MVNOs in Japan as testbeds. I think an Apple MVNO is extremely unlikely at the moment, but the article had me thinking that the mobile landscape is set for some big changes.
Notes
- I’ll take the article with a pinch of salt – it also claimed that AT&T’s deal to be the exclusive US carrier ended last week – which is not correct. This would have been all over the Internet, and I’ve seen nothing.
- Lower up-front cost, but more expensive over the life of the contract. So not actually cheaper at all.
- It is unlocked when you buy it, but after it syncs with iTunes during setup, it’s then locked to the carrier who’s SIM you’ve just inserted. So it’s only really unlocked until you start to use it, i.e. not at all. Very poor.