O2 apparently locks up UK iPhone deal, pays through nose

So at one point or another, we've heard nearly every European carrier mentioned as the likely frontrunner for Apple's European iPhone rollout. On the one hand, you can chalk that up to the ugly nature of the rumor mill, but on the other hand, it sounds like the carriers themselves were led to believe the same thing, all part of Apple's grand scheme to play them off one another and put together a gloriously lucrative (for itself, anyway) exclusive distribution agreement. The Guardian is reporting that O2 will be announced as the winner of that Pyrrhic prize for the UK market on Tuesday; the win is an enormously costly one, though, with as much as 40 percent of plan revenue (yes, revenue, not profit) going straight back to Cupertino. In other words, Apple turned up the heat on the UK carrier scene until everyone -- Vodafone, Orange, and T-Mobile -- had blinked except for the good chaps at O2. The article also suggests that Carphone Warehouse has been roped in to provide some backup on the retail front out of concerns that O2's retail presence isn't enough to push the iPhone properly, but let's be honest: if you really want an iPhone, you're going to seek it out, aren't you? We can apparently expect similar announcements from T-Mobile for the German market and Orange for France on Wednesday and Thursday, respectively, making for a pretty enthralling week for iPhone-starved Europeans (the ones that haven't unlocked, anyway).

[Matthew Johnston @ Sep 17th 2007 12:06AM]

Is makiong supposed to be clever, or is it an error? Either way, O2 is paying out the ass to be the carrier.

[Cam @ Sep 17th 2007 12:11AM]

too bad with free unlocks carriers lose the exclusivity.

[mr mike @ Sep 17th 2007 12:12AM]

hahahaha he forgot spell check

[Chad @ Sep 17th 2007 12:54AM]

hahahahaha, get Firefox buddy... it underlines words you can't spell as you type them into web pages. Think automatic spell check in hotmail, gmail, engadget, digg..etc.

[Meridimus @ Sep 17th 2007 3:34AM]

Maybe he's drunk of his nut now he knows he can't get the iphone plans on Orange in the UK?

[Meridimus @ Sep 17th 2007 3:34AM]

Maybe he's drunk off his nut now he knows he can't get the iphone plans on Orange in the UK?

[xbit @ Mar 26th 2008 6:28AM]

Remember kids - the iPhone is unlockable and, under UK law, the carrier is oblidged to unlock your phone for a small fee.

[lassi @ Sep 17th 2007 5:17AM]

they will probably just not sell it without contract that you start(and pay to stop) then, who cares if it's unlocked if you're locked in a contract.

or they'll come up with a stronger simlock - the one that was in iphone1 wasn't such a strong show.


and visual voicemail? who cares.

[Jim Halpert @ Sep 17th 2007 12:12AM]

lol, this is too funny..wow O2..i mean come on..If the iphone hack is still up..they are screwed..and hopefully they reached an agreement to keep the iphone software up to date and locked!

[madgunde @ Sep 17th 2007 1:13AM]

The vast majority of consumers buy unlocked phones directly from an authorized reseller for the carrier. Despite the free unlock being available, O2 will still benefit quite nicely from having an iPhone exclusive. You will, after all, need to be with O2 if you want visual voicemail.

[Peppie @ Sep 17th 2007 12:14AM]

I was betting this would happen once the European carriers saw how successful the iPhone was. I knew that each carrier would try to up the next one by promising more money back to Apple. Although I actually thought the carriers would fight it out in a coliseum like Roman gladiators.
I guess I was finally right on an Apple rumor :)
I didn't think it was going to be O2 though...

[Alan Partridge @ Sep 17th 2007 4:51AM]

I think the opposite happened actaully, I think Apple went to the bigger networks like Vodafone with outrageous demands and were turned down. Not only because financially it wouldnt make that much sense but it would then allow, much more powerful, manufacturers like Motorola and Nokia to their balls in a vice too.

It'll be interesting to see how the phone is sold in Europe because, due to heavy competition, there are no activation fees and phones are heavily subsidised to the point where most are free and a lot of contracts will not only give you a free phone but a free Wii/DS/PSP/iPod etc. But in the US you had to pay for the whole phone outright and did not have to sign up for the contract instore, which is unheard of in Europe, unless you buy an unlocked phone which I assume is not going to be available with the iPhone.

[Jake @ Sep 17th 2007 12:21AM]

What about Australia, that's what I wanna know. They're going to have a tough time, the most obvious choice, Telstra is pretty stubborn and has already poo-pooed the iPhone. If it's a HSDPA phone then three might have a good chance, despite they're terrible customer service ratings. Optus, Vodaphone, Virgin etc. all have crap networks and almost no decent 3G so they might never even get offered the phone.

[Ricochet @ Sep 17th 2007 12:31AM]

Considering the easiest option is for Apple to just release the current edition of the phone which only operates on 'crap' networks anyway, it sounds like Optus, Vodaphone and Virgin all meet the criterea quite nicely!
As far as I know, Telstra is the only one with an EDGE network though which may give them the edge, but they're far to busy pushing NextG. I have an unlocked phone working fine on Telstra here but the EDGE is very pricey.
They may think that a NextG compatible iPhone would be just what they need to really kick off their NextG network which has had fairly lacklustre support so far, and they may just be willing to pay the ridiculous prices Apple demands in order to do so!

[luidabruin @ Sep 17th 2007 1:00AM]

"they're" not the same as "their"

come on people... at times it hurts my brain to read these comments!

[Jake @ Sep 17th 2007 2:32AM]

What are you talking about... "They are going to have a tough time....." makes perfect sense.

[SimplePanda @ Sep 17th 2007 12:20AM]

Any time now, Rogers Canada. I know you'll have to "stoop" to making your data plan less than thousands of $$ per month for something so small as 1GB of data transfer, but it's time to join the modern world.

[dj-kenpo @ Sep 17th 2007 1:07AM]

rogers doesn't bend for anyone. as far as the rogers family is concered 9if you've ever been in the same room as them.. nevermind meet) they own the planet.

apparently they didn't get the memo they're just a lame canadian company with bad cell service and overpriced tv/phone.

[Andrew Stone @ Sep 17th 2007 12:37AM]

What is this iPhone you all speak of? Some sort of new device to call people with?

[Chad @ Sep 17th 2007 12:52AM]

Thank you for saying this! I always try to find this same joke on every iPhone thread before I can read the next article. What can I say, when I find a joke I like I stick with it. Even when no one else thinks it's funny anymore because they're read it on every iPhone thread, I keep a keen eye out for it because I know it'll turn my stomach over. Sometimes, I even throw up.

[Andrew Stone @ Sep 17th 2007 1:28AM]

I have two observations in response to your reply.

First, in the time it took you to type that, you probably could have saved upwards of 30 of your precious gadget blog reading time for poking through comment threads for useful, insightful reading.

Second, some of us don't feel the need to READ every post, and would certainly never take the time to get annoyed because there were similar comments in every thread.

And as a PS, i was one of those that bought the iPhone early, and even one of the ones that wasn't pissed when the price dropped. So take a deep breath, pull whatever is stuck up your rear out, and maybe talk a walk outside? Its a JOKE. Crazies like you only make it more funny.

Gracias.

[LordFarkward @ Sep 17th 2007 1:36AM]

Mr. Stone, stop digging. you're already surrounded by piles of diarrhea, continual digging will only result in you drowning in it.

Chad, i think i'm not the only one in wanting to nominate you for getting rid of all the old-jokers and all the haters/fanbois/trolls. oh and spammers. cheers.

[Andrew Stone @ Sep 17th 2007 1:48AM]

If you looked hard, you'd find i regularly contribute to this site... and i feel as though its generally pretty worthwhile comments... although if you guys are looking for the best use of your time (and are pissed cause i "wasted" yours with my quip), i doubt the Engadget comments section is the best place to spend it.

But it is to the point that even I, an iPhone owner and gadget guy, am getting tired of the Apple news.

I just don't get how every possible rumor of a maybe carrier for a phone in EUROPE gets so much coverage. Or how 3/5ths of both the breaking news and featured stores in the gadget world surround one company's products, and DONT EVEN MENTION THEIR PC LINE.

So i made a snarky comment. My bad. I didn't realize we all had to be very serious, astute, positive, on topic and well informed commenters here, while working hard not to ruffle anybodies feathers, and most importantly not piss off any apple fanboys. Please accept my apology?

And don't tell me to just use the non-apple feed. I own an iPhone, a MacBook Pro, and a Mini. I want that news. I just wish we could bring it down to only things important and relevant. I'm sure we'll see this story again soon, when (if) it confirms. Couldn't it have just waited till then?

[LordFarkward @ Sep 17th 2007 2:07AM]

if you're really an owner of their products, i'm sure you'd understand why this blog is filled with apple's news - being dubbed as a marketing genius, jobs knows how to get his stuff to be talked about, he knows how to get his stuff hyped, and he knows how to get pretty much everyone reading over them: maximal advertising with minimal cost

and this doesn't only apply to gadget sites, but also on financial sites. there will alos be news regarding the company on reutors/bloomberg/FT etc

apple is now by far the most talked about company, and if you failed to observe that and just accept it, it doesn't seem like you have a good sense of what's happening around you

disclosure: i have never owned a single piece of apple products besides their shares. i think their ipods are not good enough for me (i use i-audio), i think their phones are not good enough for me (i need 3.5G, real keypad/keyboard), and i think their computers are not good enough for me (i like to game).

[Reader @ Sep 17th 2007 2:18AM]

AHAHAHAHAHAHA!!

HAHAHAHA!!

Funny man! You had me going on that one! "What is this iPhone..." damn that's a good one!!!



Anyways, don't quit your day job. I don't care if I get marked down on this, but goddamn the old jokes need to die.

[Andrew Stone @ Sep 17th 2007 2:18AM]

First, this isn't a financial blog. If you wanna talk stock impact, head elsewhere. There is a blogging stocks link a ways down for you.

And second, it IS possible to enjoy Apple's products without getting redic about it. I can own all that apple stuff and not feel the need to pleasure myself during every jobs event. And i can care about the company at a level that isn't to the point of working myself in to an "oh my god they might go t-moble, they might go vodafone, they might go 02" frenzy.

This isn't TUAW or a mac message board. Its GADGETS. There isn't a balance here right now. Enough people agree to necessitate a non-apple feed. I think the problem could be solved by just not posting every rumor that some crazy on a whim throws out there, or every pre-announcement, when we all know it will be followed by the official release.

I guess if there was some Apple restraint implemented, it'd mess with your stock price and you'd be bummed out though, so i see your point of view. Agree to disagree, mmmmkay?

[LordFarkward @ Sep 17th 2007 2:57AM]

...

1) i KNOW it isn't a financial blog, hence i called it a 'gadget blog' earlier...

2) the point i was making with the financial blog is just that apple IS the 'talk of the town' ever since they've decided to launch the iphone, in gadget-related blogs/magazines, financials, or even girly magazines (my gf reads them and pointed out the iphone related articles to me)

3) again, i'm saying that there IS A REASON why apple is being talked so much and why it appears to be on a lot of articles in a blog that is related to gadgets - simply because there's a lot of news relating to apple THAT PEOPLE ARE INTERESTED IN. check out the previous 10 pages or so - articles that are apple related consistently get a lot of comments, indicating the fact i've pointed out in point 3.

4) you're indicating that there're a lot of apple fanbois that cream themselves whenever there's something apple related - yes, i agree, and i hate them too. they (the cult) are the sole reason for the creation of the opposite end - the apple-bashers, where they flame everything whenever there's something apple related - which, incidentally, i also hate. but this is beside the point that apple is STILL the most talked about company in gadget and financial blogs.

5) after all this, don't try to derail the initial intention of chad's point - old jokes get old, and when old jokes get's TOO old, it gets annoying. REALLY, really annoying.

[speakafreaka @ Sep 17th 2007 10:05AM]

WOOOOOOOO BLOGFIGHT!

[Andrew Stone @ Sep 17th 2007 10:21AM]

Look, i know i'm gonna get low ranked, and i know there are people that disagree, but if the "joke" that you all are getting your panties in a twist over is tired, than it is only because there are so many chances to use it.

Why can't this story go on engadget mobile? Or wait until its a real story and confirms, because i'm sure we will see it again then, right?

And just as annoying as the Apple fanboys, The MS fanboys, the Playstation fanboys, or the whatever else fanboys, is the constant, unending coverage of one or two products. The "joke" i made was trying to make that point, not trying to make you giggle, but i think you missed that point. Every other story is iPhone rumor, iPhone update... some of this stuff just isn't necessary. Or could go on engadget mobie, or could run once, as a story, when it happens, instead of twice, as a rumor and then again as a story.

Why are you getting so worked up defending coverage of a product you don't even own? Obviously if it was so great, if the cult was so spot on, if steve jobs was the genius you claim, you'd run out and drop the cash for an iPhone. I get tired of it, and i have one in my pocket. How can people who own a Moto Q stand it?

Oh yeah, they read the non-apple feed. Which maybe wouldn't be necessary if some restraint was used in deciding what apple stories to run.

Of course, we wouldn't be having this debate if some restraint was used when reading comments you don't appreciate / find useful / want to hear. Restraint isn't a big thing with Apple fans, which is probably why my 17 words have gotten you all excited to the point that you are beating a dead horse just to get me to feel like i should be cool with all the iPhone boners out there.

[Gus @ Sep 17th 2007 11:08AM]

heh, not trying to add oil to the flame, but if you take a look at the conversation, it was you who started wanting to do this whole debate, from your 17 word to your own long justifications

and it seems like you're still missing the point regarding why apple's getting such coverage. oh well, if you fail to see even after their to-the-point posts, you won't get it ever.

and seriously, at this point, as lordfarkward said, stop digging. you really should.

[Andrew Stone @ Sep 17th 2007 6:17PM]

http://www.engadget.com/2007/09/17/steve-jobs-arrives-in-london-jeans-turtleneck-and-new-balance/#comments

http://www.engadget.com/2007/09/17/is-this-oranges-french-iphone/#comments

Read the first few comments attached to each of those posts from today. For real. Its popular opinion.

There is no gadget news attached to the Jobs in London story. I'm sure there will be something tonight / tomorrow when he announces, so why not just hold off until then?

And the Orange iPhone in France story is just one of several possible European carrier stories that have posted since this one i'm commenting on. Couldn't this be a daily "iPhone rumor roundup"? Or better yet, why don't we just wait and see what happens, and then post on it, instead of taking every rumor of a possible carrier and putting it up? I mean, did we really need a picture of a phone on the t-mobile network attached to a story from a French site claiming to know it'll be on Orange? A site that, at one point, actually states that "the price could be higher for models with more memories"?!? For REAL?

PUT IT ON ENGADGET MOBILE, OR START ENGADGET APPLE, OR ENGADGET IPHONE, OR ENGADGET RUMOR.

Or better yet, if you are going to get excited about every rumor about a company with a set of very overzealous fans, know that there are going to be people (like me) who will poke some fun. And deal with it.

I'm done arguing with you fanboys (and stock owners who don't feel the product is good enough for you, WTF) here. I like John's points in the French iPhone on Orange post, so i'll refer all further whining about my joke, and Steve teet sucking in general, there.

Hasta.

[LordFarkward @ Sep 17th 2007 8:10PM]

as gus said, i'll save my breath repeating what i've said.

but: "I'm done arguing with you fanboys (and stock owners who don't feel the product is good enough for you, WTF) here."

This clearly shows why you don't understand my point - it's a great company, i myself don't like ther products, but i SEE WHY people like them, and on the contrary, you fail to see the reason of the hype. Oh and, the 64.8% return in just over 6 months is telling me that i'm right.

[lilcruz @ Sep 17th 2007 12:52AM]

dont mean to be shrud... but isnt this STALL NEWS!!!!!

[Chad @ Sep 17th 2007 12:57AM]

Another guy who needs Firefox.

[Ashish @ Sep 17th 2007 5:53AM]

Chad, you do know 'stall' is actually a word right?

Firefox isn't an all knowing robot; it just corrects spelling mistakes.

[lilcruz @ Sep 17th 2007 12:56AM]

opppss STALE!!!! not STALL

[Chad @ Sep 17th 2007 12:58AM]

Noble recovery.

[SP @ Sep 17th 2007 12:59AM]

This is all great, but how about CANADA?

Stupid rogers...I hope they realize they are destroying themselves. $45 Dollars a month for 4MB of data just won't cut it on this planet anymore.

[ThePengwin @ Sep 17th 2007 1:04AM]

So... You're telling me out of the great line of smartphones under the O2 brand name, thaty want to use an inferior product on the O2 network? Im not to sure if they are related (O2 mobile and the O2 carrier) but id prefer an O2 smartphone over an iPhone anyday.

[Aaron @ Sep 17th 2007 1:15PM]

CANADA? Whats's a Canada?

[Archietype @ Sep 17th 2007 6:54AM]

@ ThePengwin

If you're referring to phones like the o2 XDA, they're just rebranded devices from companies like HTC. Some of them are available on other mobile networks with different names.

[Spoon!! @ Sep 17th 2007 1:16AM]

This is bad news the way Apple is able to grab a percentage of carriers' revenues.

They'll be able to undercut any phone manufacturer on the market because of their monthly stream of income from the carriers. Expect other manufacturers to require a similar deal from the carriers when releasing new phones... or a migration from GSM carriers CDMA carriers.

[Constable Odo @ Sep 17th 2007 1:46AM]

For an overpriced, underfeatured handset that nobody wants, a lot of carriers seem to be bending over forward to get their grubby mitts on iPhone exclusivity. Ka-ching $$$. What's wrong with this picture?

If nobody decides to buy the iPhone, what difference does it make how much money Apple gets for each phone. And why would a smart European buy a cellphone without a user-replaceable battery? Every cellphone in the world has a user-replaceable battery.

No iPhones for the land down under. Aborigines don't need iPhones because smoke is cheaper and not tied to any carrier.

[Reader @ Sep 17th 2007 2:23AM]

No one wants? Erhm, sorry, but sales figures state otherwise. I am by no means a Mac fan, actually one of the few pro-windows guys, but I can't let a blatantly untrue statement like that go by.

[LJKelley @ Sep 17th 2007 1:27AM]

I'm amazed how varied the networks are. In stead of going T-Mobile in the US, UK, Germany, Netherlands, Austria etc or Orange in UK, France, Netherlands, Israel, Spain, Denmark etc.. or Vodafone in UK, Sweden, Denmark, Italy, Germany, Australia, etc..

Every country so far is a different network... So I guess every network will pay out the nose somewhere.

[MattFM @ Sep 17th 2007 3:22AM]

It may not be linked, but a lot of O2 stores are being hastily refitted at the moment. There are three that I know of that closed last week, mostly without warning so that they could be totally gutted out. If true, I'm going to be lucky, I work about 100 metres away from both an O2 and carphone warehouse store.

Worth also pointing out that carphone warehouse pride themselves in selling phones sim free and direct from the manufacturers (i.e. no badges or customised menus). You get a slight discount if you buy a sim pack but most people don't bother using them and simply swap their existing sims over. Let's hope that policy stays.

[Steve @ Sep 17th 2007 12:41PM]

That only happens when a phone isnt a network exclusive

[Liam H @ Sep 17th 2007 3:50AM]

Apple are mad. They've got Carphone Warehouse involved. The worst customer service known to mankind. I have been waiting for the iPhone like some mad fanboy. Carphone Warehouse has made my decision for me - I'll go for a Touch instead.

[Fred @ Sep 17th 2007 4:09AM]

"too bad with free unlocks carriers lose the exclusivity."

Too bad you forgot that the carrier needs to support visual voicemail in order for the iPhone to work properly - so unlocked phones used on a different networks will not work properly.

[Thirsty Ferret @ Sep 17th 2007 4:36AM]

http://www.guardian.co.uk/technology/2007/sep/17/mobilephones.apple

Well at least it's coming over here. To be honest, glad it's not on either of the other networks. Vodafone just over price on everything, Orange has rubbish network coverage and T-Mobile can't get a decent deal together. I would have preferred news that it was going on 3 and we'd get a 3G model, but hey. Still on the fence about getting one, but the price will probably put me off.