Mixed smartphone fortunes for Orange
Published: 9 February, 2009
A French court has upheld the ban on Orange's exclusive deal with Apple for the 3G iPhone, a decision that is expected to cost the cellco as much as €200m in lost sales and data fees, and possibly set the tone for similar moves in other EU countries.
Orange had appealed the decision, made by competition authorities last December, but the Court of Appeals in Paris has upheld the original verdict. The rival that lodged the initial complaint, Bouygues Telecom, has already jumped in the grave of Orange's exclusive, and is reported to be in the final stages of negotiating its own iPhone deal, hoping to launch the handset by mid-year.
Apple gained significant control over the conditions of its initial operator deals, via the exclusive route, but has shifted back from that policy recently, in order to target countries where such deals are illegal, and to increase worldwide volumes, especially as iPhone prices and margins fall.
On the brighter side, Orange is making an early move to ride the wave of mass market smartphones, pinning its hopes for the downturn on business services, a broader uptake of smart devices, dongles, and SIM-only deals. In the UK and France, it is targeting the growing youth base for high end phones, launching a prepaid BlackBerry Pearl 8120 for €160, with a monthly internet add-on costing €6. This is the first prepaid BlackBerry available in the UK.
Orange said that over 60% of UK mobile customers are now on pay-as-you-go deals, and "it was pleased to be bringing one of the most popular email and multimedia devices to the masses". This will boost RIM's own strategy of pushing further into the consumer web services market via tactics like social networking.
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