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O2 to hand over up to 40% of iPhone service revenues to Apple

DailyTech reported in early July that Spanish-owned O2 won exclusive rights to the Apple iPhone in the United Kingdom. There were vague details of revenue sharing bantered about among analysts at the time, but today the concrete details have come to light.

According to The Guardian, Apple will rake in as much as 40 percent of the revenues generated by O2 customers using the iPhone. This is in addition to the commission and revenue sharing imposed by O2's relationship with Carphone Warehouse. Carphone Warehouse will be the sole retailer for O2-based iPhones in the UK.

"I can't imagine any of the operators agreeing to terms like that," said one UK telecom official. "It is an extraordinary number."

It is believed that Apple receives $3 to $11 per month from AT&T for each iPhone customer in the United States.

While O2 may have the sold it soul to Steve Jobs to gain exclusivity in the UK, it is reported that T-Mobile and Orange will have iPhone-exclusive partnerships in Germany and France respectively. The T-Mobile announcement will be made on Wednesday, while the Orange announcement will be made on Thursday according to The Guardian.

One thing that is uncertain for either market is pricing for the iPhone itself. Apple made rather large waves in the North American marketplace when it priced the 8GB iPhone at $599 -- it still wasn't enough to dissuade the iPhone faithful from lining up for hours to get their hands on the device.

Apple garnered even more attention when it decided to drop the price by $200 to $399. That move sparked a revolt from early iPhone customers and eventually led to a surprisingly apologetic Steve Jobs with $100 of store credit in hand.

Updated 9.19.07: 
As expected, Germany today officially chose Deutsche Telekom to be the official German host of the iPhone, which will go on sale on November 9.  The 8GB version of the iPhone will cost German consumers $557.

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RE: What is O2 thinking?
By Gul Westfale on 9/18/2007 1:00:26 AM , Rating: 2
one of my friends here in montreal wanted to get one when it comes out, but then he read this and bought a sony ericsson instead:

i'm sticking with my nokia. no way in hell i'm gonna pay that kinda money to call somebody on he phone.

RE: What is O2 thinking?
By Ralph The Magician on 9/18/2007 1:29:26 AM , Rating: 3
Sounds like your friend is a complete tool if he genuinely wanted something, and then changed his mind and bought something else because of a piece of internet satire.

RE: What is O2 thinking?
By Maskarat on 9/18/2007 2:14:45 AM , Rating: 5
And what is a member of the Church of Jobs called then?

RE: What is O2 thinking?
By AlphaVirus on 9/18/2007 10:20:44 AM , Rating: 2
I LOL so hard when I read that.
People honestly follow apple's cult and dont think anything is wrong because their products "look cool".I am glad I have a mind of my own and have not gotten sucked into this bregade of evil fellowship of mindless drones.

RE: What is O2 thinking?
By rsmech on 9/18/2007 2:29:13 AM , Rating: 2
Wrong, to be a complete tool he would have bought it because he read the New York Times satire of the phone. Was he wrong in the comparisons?

RE: What is O2 thinking?
By zerocool84 on 9/18/2007 3:16:29 AM , Rating: 2
That site made my LOL

RE: What is O2 thinking?
By Polynikes on 9/18/2007 11:37:41 AM , Rating: 2
Hehe, good link.

RE: What is O2 thinking?
By Locutus465 on 9/19/2007 11:41:52 AM , Rating: 2
Your friend is a moron if he made a purchasing desision based on that...

"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)

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