Feeds

iPhone makes eyes at T-Mobile and Orange

Darling, I think we should see other telcos

Build a business case: developing custom apps

The days of O2's exclusive hold on the iPhone are probably numbered - T-Mobile has told us it's in talks with Apple about ranging the iPhone 3G in the next few months.

The deals being discussed only include the iPhone 3G, and O2's exclusive on the 3GS seems to be secure. But even this represents a major shift in how Apple markets the iPhone, which currently relies on network exclusives to get a decent subsidy; giving that up shows either greater confidence or reflected disappointment in how O2 has priced up the latest offering.

T-Mobile has been telling callers that the company is in talks with Apple about ranging the iPhone 3G, and Orange is also rumoured to have plans regarding Apple's last-version handset. That would leave O2 to explain to users why the 3GS is better; doing Apple's marketing for it.

O2's exclusive on the iPhone will have cost it dearly in terms of subsidy - manufacturers know what an exclusive is worth and use them to extract a big subsidy. Several years ago your correspondent wrote a piece claiming the iPhone would fail, largely because of Apple's reluctance to accept the operator shilling in the form of handset subsidy. Apple may have been naive about the mobile industry, but it learnt quickly (more quickly than your author expected) how important the subsidy was, and how the company paying that subsidy is the real customer - which is why we suddenly see MMS enabled, and tethering disabled.

The other way to increase subsidy is to link to lots of operator services - a menu item for "Get more games" is worth a few quid, while a pre-installed music application linked to the operator can make an expensive handset cheap. But those options aren't available to Apple, which wants all the services revenue for itself.

In the USA AT&T had hoped that its exclusive on the iPhone would make the company "cool", but in reality it's become the whipping boy for everything that goes wrong with the handset - blamed for poor reception, limiting tethering and failing to support MMS. Customer loyalty is to Apple, not AT&T, and much the same thing has happened in the UK, where iPhone users love Apple but have little time for O2.

So Apple have little to lose by allowing the iPhone 3G on to other carriers in the UK, even if the 3GS remains exclusive to O2 for the moment. Customers don't consider themselves to be using Orange, T-Mobile or O2 any more, they're Apple's customers regardless of who happens to be carrying the signal... which is just how Cupertino would like it. ®

The essential guide to IT transformation

More from The Register

next story
So, Apple won't sell cheap kit? Prepare the iOS garden wall WRECKING BALL
It can throw the low cost race if it looks to the cloud
End of buttons? Apple looks to patent animating iPhone sidewalls
Filing suggests handset with display strips
One step closer to ROBOT BUTLERS: Dyson flashes vid of VACUUM SUCKER bot
Latest cleaner available for world+dog in September
Samsung Gear S: Quick, LAUNCH IT – before Apple straps on iWatch
Full specs for wrist-mounted device here ... but who'll buy it?
Apple promises to lift Curse of the Drained iPhone 5 Battery
Have you tried turning it off and...? Never mind, here's a replacement
Now that's FIRE WIRE: HP recalls 6 MILLION burn-risk laptop cables
Right in the middle of Burning Mains Man week
Apple's iWatch? They cannae do it ... they don't have the POWER
Analyst predicts fanbois will have to wait until next year
Reg man looks through a Glass, darkly: Google's toy ploy or killer tech specs?
Tip: Put the shades on and you'll look less of a spanner
HUGE iPAD? Maybe. HUGE ADVERTS? That's for SURE
Noo! Hand not big enough! Don't look at meee!
prev story

Whitepapers

Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up distributed data
Eliminating the redundant use of bandwidth and storage capacity and application consolidation in the modern data center.
The essential guide to IT transformation
ServiceNow discusses three IT transformations that can help CIOs automate IT services to transform IT and the enterprise
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.