T-Mobile, Orange and O2 land Europe iPhone deal

As Apple feasts on 10% of revenue

Posted in Mobile, 22nd August 2007 10:23 GMT

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T-Mobile, Orange and O2 are to sell the iPhone in Germany, France, and the UK respectively, according to the Financial Times. The paper also reports that the operators have agreed to give Apple 10 per cent of all revenue generated from iPhone users.

The companies concerned have dismissed the story as speculation and rumour, though the FT quotes "people familiar with the situation".

Sharing 10 per cent of revenue is a remarkable development. While manufacturers such as Nokia have been embedding applications into their phones to bypass the operator, this marks a real shift in power to the handset manufacturer - a development other manufacturers are unlikely to ignore.

Part of the attraction of the iPhone, to operators, is Apple's insistence that operators do not subsidise the device. This makes the launch low-risk as consumers pay the full price, but puts the iPhone on the shelf beside a free Nokia N95.

The FT is predicting a UK launch this autumn, with Germany and France following next spring, but remains silent on the matter of 3G capabilities.

O2 paid £4.03bn for its 3G license, so launching a data-centric device which makes no use of that investment would be politically difficult.

If Apple really has convinced the operators to pass on 10 per cent of all revenue, it will open the doors to other manufacturers to demand the same. Nokia would already like to be seen as a service provider, and Apple may give it the opportunity to have a go. ®

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