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O2 to axe iPhone prices?

Prepping for new models

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O2 is poised to reduce prices on the iPhone 3G in the UK. It would seem.

According to a report in Mobile Today, the online arm of the UK cellular-industry trade rag Mobile, the iPhone will be free on £35 and £45 per-month plans. Currently, the 16GB version is free on a £75 per month contract and the 8GB version is free on £75 and £45 per-month plans. The new pricing will apparently begin in May.

Mobile Today's sources say that the reason for the price drop is simple: O2 wants to reduce its inventory before new iPhones arrive "in June or, most likely, July."

Apple, of course, has made no such announcement. Rumors, however, have been rife about a new "iPhone nano" to be released soon - although much of that speculation has centered on that shrunken 'Phone being prepped for the Chinese market.

Thursday's announcement that Apple would be giving a sneak peek on Tuesday at the next version of the iPhone's operating system, iPhone Software 3.0, has led to a riot of rumors about what improvements may be in store for the iPhone. Software speculation may have briefly stolen the thunder of iPhone hardware rumors - but expect the rumor mill to crank up again as June approaches.

O2's parent company, Telefónica Europe, recently announced the sale of the one-millionth iPhone in the UK. Mobile Today's sources say that France Télécom's Orange wants to grab a piece of that action and that the company is negotiating with Apple to share iPhone distribution rights in the UK with O2.

The current iPhone 3G was released into the wild in July 2008. Whether it will be retired after a mere year or so of availability or remain in Apple's line-up after new iPhone models ship remains a matter of speculation.

Speculation? About the iPhone? Incredible! Or, as the gentlemen at Orange might say, "Incroyable!" ®

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