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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: Exclusive?
By Johnmcl7 on 9/18/2007 7:41:19 PM , Rating: 2
It's not capped, I can't remember the exact terms but the networks are allowed to charge an 'admin fee' - I think it's just Orange that charge the 20 quid, others charge 35 quid.

Also getting the unlock code isn't that simple, with most companies you will need to have been with the network a certain time which is usually the minimum length of the contract. I believe Orange will unlock it for you earlier but only if you pay all your line rental upfront.

John


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