O2 price cuts point to new iPhone this summer
Published: 16 March, 2009
It seems increasingly likely that Apple will release an upgraded 3G iPhone this June or July, with UK exclusive operator O2 planning to slash prices on current models, and with Apple itself promising to show off the new release of the software tomorrow.
According to reports in Mobile Today, O2 is to drop the price of the current 16Gb model, offering it for free even with some cheaper tariffs, as it looks to clear the shelves for the new device, as well as boost its volumes, increasing its chances of keeping its exclusive for another year or more.
Currently the iPhone is 100% subsidized for customers taking out a tariff of at least £75 ($107) per month, while those taking out £35 or £45 monthly plans must pay between £59 and £159 ($84 to $226). From May, O2 will reportedly offer the iPhone free with any tariff above £35 ($50). Austrian iPhone carrier T-Mobile has also cut its prices.
The rumor mill is doing overtime again about what the new iPhone will look like - just a more heavyweight version of the current phone, perhaps with much demanded software enhancements like copy-and-paste, background processing and MMS; or a new format, such as the 'iPhone Nano' that has been anticipated (and even pre-emptively cloned) since last fall. This would have midrange functionality, with lower spec memory, camera and screen size, rather than taking on the 'superphones' from LG, RIM and others.
Another report says that O2 will lose its exclusive with the launch of the new phone. The details of Apple's initial carrier deals have been closely guarded, but it is thought that both AT&T and O2 could keep their exclusives until 2010, but with potential early break clauses dependent on sales volumes. This has led to accusations that O2 has focused so heavily on iPhone sales that it has excluded other strong smartphone choices from its catalog. It is possible that the original deal would not cover a new format device.
Sources say that Orange - which lost its French exclusive after a legal challenge - is talking to Apple about being able to offer the new iPhone in the UK, alongside O2. Orange currently sells the iPhone in 27 countries, including France.
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