Wednesday, September 30, 2009

iPhone wars ahead?


Interesting to see that Apple are ending their exclusive distribution deal with O2 for the iPhone in the UK. This week Apple have announced that the iPhone will be available on both the Orange and Vodafone networks.

For the last two years the exclusive deal has meant that pricing of the handset could be controlled and maintained at a premium level. It will be interesting to see if that continues once there is competition in the market - customers will have more choice of network offers with more variety of the bundles of minutes and texts available to them. Will the outcome be that prices will go down?

In terms of distribution strategy this is a significant change for the iPhone. O2 are saying that they always knew the deal was not necessarily exclusive long term, but there is no doubt that they have benefited through the sale of 1.5 million handsets and the associated income from the contracts which accompany them. Some commentators have made the point that the O2 network has struggled to cope with the amount of data which iPhone users have consumed - more than predicted apparently - so the move to more operators will spread this.

So far, I haven't seen any information about the situation regarding retailers of the handset - to date it has only been available directly from Apple, through O2 stores or Carphone Warehouse. If that changes it will certainly put further pressure on price - witness the heavy price promotion tactics of some retailers.

An interesting one to watch over the coming months.