Following yesterday’s news that mobile carrier Orange are to begin selling the iPhone here in the UK, Vodafone have announced that they too are jumping on the Cupertino bandwagon, albeit not till early 2010.
And with O2’s two-plus year monopoly on Apple’s iconic device therefore well and truly broken, overpaid analysts and most of the tech press/blogosphere have been quick to predict a pending price war for the iPhone and associated tariffs this side of the pond. However, I’m still not convinced that this will be the case.
As I’ve already argued, the carriers need the iPhone more than Apple needs them, resulting in a classic case of divide and conquer. Orange and Vodafone could afford no more to sit by and watch their high end customers flock to O2 in order to get their hands on the so-called Jesus phone. Vodafone CEO Vittorio Colao has admitted as much, telling investors that not having the iPhone has hindered the ability for the carrier to remain competitive in the UK.
So instead of one carrier signing a pact with the devil, we now have three.
Remember Apple has already achieved what Nokia, the world’s largest handset maker, has been trying to do for years: completely own the customer relationship (think marketing, post-sale services and billing). Only, as The Register reports, Apple also appears to own the carrier relationship too.
Our understanding is that Apple not only reserves the right to get involved in pricing of handsets, but also expects “partner” operators to contribute generously to Apple-controlled advertising. This is on top of the ongoing revenue share to which operators around the world have signed up. Operators used to demand exclusivity before agreeing to such things, but such is the lure of the iPhone, that Apple can call the tune without having to offer the additional inducement of an exclusive deal.
Apple already offers the iPhone through multiple carriers in many countries, but the company is very careful to maintain control of the platform, regardless of the network from which their customers get their iPhones. Apple considers iPhone users to be Apple customers – network operators are just dumb pipes to Cupertino.
The end result of Apple ‘owning’ both customer and carrier relationships, says The Register, will be “near-identical offerings, differing only in the colours of the attached [carrier] logos”.
In other words, don’t expect an iPhone price war anytime soon.