Blog Post

O2’s Reign Ends: Orange to Sell iPhone

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

orange-logoAnd just like that, O2’s reign of terror comes to an end. This month sees the end of O2’s exclusive rights to sell the iPhone in the United Kingdom, and Orange has already announced it has a deal in place with Apple (s aapl) to sell the device. From the Orange UK news page:

Orange UK and Apple have reached an agreement to bring iPhone 3G and 3GS to Orange UK customers later this year. Orange globally now offers iPhone in 28 countries and territories.

Orange, which has the largest 3G network covering more people in the UK than any other operator, will sell iPhone in all Orange direct channels including Orange shops, the Orange webshop and Orange telesales channels, as well as selected high street partners.

Orange doesn’t say anything about pricing, plans or even the date the iPhone will become available, but does offer a webpage where customers can register their interest.

At the time of writing this article, O2’s home page, news pages and much of their usual website is “temporarily unavailable”, but Macworld UK has the text of a statement issued by O2 (though they don’t offer a link to the source):

According to Macworld, O2 says:

We’re proud that we’ve been able to offer an exclusive iPhone deal to our 20 million customers for the last two years. We always knew that iPhone exclusivity was for a limited period of time, but our relationship with Apple continues and will be an ongoing success. We have over 1million iPhone customers and they remain very important to us.

Interestingly, while speaking of a continued relationship with Apple, O2 has (somewhat paradoxically) used the opportunity to talk-up the Palm Pre.

We aim to offer our customers the best devices on the market, including becoming the home of Smartphones and we are really pleased to now add another device in the Palm Pre.

Home of smartphones, eh? In the dark ages before the iPhone, I was, for many years, a Windows Mobile customer with O2. And life was hard. Those phones were expensive and inexpertly supported by O2 who, it seemed to me, treated its premium-paying smartphone customers at best as something of an oddity, and, at worst, second-class citizens. It might have been the home of smartphones, but in my experience, it wasn’t a happy home.

And yet, life as an iPhone customer with O2 hasn’t been so bad — and certainly not as appalling as our American friends’ experiences with AT&T (s att). We’re lucky not to have been plagued with dropped calls and painfully limited service. We also got MMS months ago, pretty much when Apple announced it, and not many months later.

But life on O2 has been expensive. Unlimited data comes with a fairly high price when compared with more reasonable data plans available elsewhere. (O2, apparently, knows it can squeeze its iPhone customers for the extra pennies.)

Hopefully the competition from Orange (and, potentially, other operators down the line) means that prices will start to fall, not only on the tariffs themselves but also on the actual handsets. We may also see an end to insanely expensive upgrade ‘settlements’ such as the one UK customers faced earlier this year, when the only way to ‘upgrade’ from the iPhone 3G to 3GS was for a customer to “buy out” their contract as well as pay the premium price for the new handset. (For anyone mid-way through their eighteen month contract, that was far more expensive than simply buying a 3GS handset sans-contract and simply swapping the SIM cards.)

Of course, competition-induced lower prices doesn’t necessarily mean the return of the attractive subsidy pricing we saw when the 3G was released, but it surely should mean lower prices across the board than those we have endured since 2007.

I can’t wait to see how the competition affects the pricing and promotion of Apple’s next iPhone revision in 2010…

4 Responses to “O2’s Reign Ends: Orange to Sell iPhone”