You can now see very clearly why Vodafone was so loathe to take the iPhone on the same kind of data terms that Apple got in the US, where its local operator exclusive partner pays it part of the data revenues that it triggers ‘ because Vodafone knew that sooner or later it would have the iPhone in its plum territories, and now it has.
A rushed statement came out earlier this week designed to make it clear after an earlier announcement by Orange UK, that Orange will not be the only UK cellular operator to get the iPhone once the O2 exclusive is dead and buried.
Vodafone also said that it would be selling the iPhone in Ireland, which means that the O2 exclusive there will also end.
But O2 will get one more Christmas out of the deal, with Vodafone getting to sell both the iPhone 3G and 3GS in early 2010. Naturally customers can register interest online which won’t commit them because pricing, data tariffs and overall packages are not yet ready to be disclosed.
Vodafone is widely thought to have said no to the iPhone when Apple first touted it around Europe, but has already picked it up in thirteen of its operating companies, so Vodafone positions this as simply bringing the UK and Ireland back into line. Vodafone’s French affiliate SFR was able to begin selling it once a court in France said that Orange could not have an exclusive there, and also sells it in another of its major markets, Italy, where the iconic device is already available through all major carriers.
Of its big markets Vodafone still has Germany and Spain to sort out where Apple exclusives are still in place with T-Mobile and Telefonica, but they are likely to open up shortly.
It has been a retro move by Apple to even introduce this idea of exclusives over longer periods. Other exclusive handset operator deals expire after 6 months, or even less, but Apple thought that the only way to guarantee the handset’s profitability was to grab some of the increased data revenues, and in order for cellular operators to go along with that, they wanted control of the handset for a far longer period.
This means that each new deal will leave Apple with lower margins, but as long as its volumes significantly increase that should mean that it continues to get the same or more profit from its overall iPhone business.
Earlier in the week Orange announced that it would begin selling the Apple 3G and 3GS models in time for the Christmas rush, which means its deal was struck before Vodafone’s.
O2 has probably already snapped up anyone that was that impressed with the iPhone, and the danger is that the two year contracts signed with the first devices, will reach the end of their lives in no time at all, and then consumers can go back to any operator they are comfortable with and keep their iPhone.
Our guess is that O2 will turn the battle for iPhone customers into a price war. Meanwhile T-Mobile with its Android devices and 3 UK, with its Skype phones, are both set and, in our view, would only take the iPhone on the most basic of terms.
Already O2 has lined up exclusives like the 1GHz Toshiba TG01 and the Palm Pre to replace the iPhone, while Orange has announced several strong phones such as the Android Hero and Vodafone has also carried early Android exclusives. At the end of its two-year exclusive, O2 says it has more than a million iPhone subscribers.