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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 Locutus465 on 9/19/2007 11:44:25 AM , Rating: 2
You would think that after all the efforts Apple had to make here to get real iPhone sales going (i.e. beyond launch day madness) O2 would have been smart enough to realize that the iPhone isn't worth it at all! There are a whole bunch of acceptable (and depending on your POV better) alternatives out there, for way cheaper. I'm loving my i730 which lets me use any Mp3 as a ringtone with out having to double purchase it for instance...

RE: What is O2 thinking?
By msheredy on 9/19/2007 12:07:46 PM , Rating: 2
I actually look forward to days when good news for Apple is annonced on this site. Every Apple hater climbs out from their dull boring lives to rant. To say that the iPhone is an overpriced phone and that there are cheaper more feature filled options out there goes without saying. I see it every day in the automotive industry too. Why buy a Mercedes when you can get a Nissan with more standard options for less??? Because of the experience, that's why. Don't try to figure it out... It's just human nature. Now go have fun trying to figure out your "Smart phone" while I have fun using my iPhone.

RE: What is O2 thinking?
By cochy on 9/19/2007 12:55:57 PM , Rating: 2
Is the iPhone not considered a "Smart Phone"?

Which Smart Phone do you find excessively difficult to use?

RE: What is O2 thinking?
By Locutus465 on 9/19/2007 3:14:03 PM , Rating: 2
I had no problem figuring out how to set an Mp3 as my ringtone on my i730 *FOR FREE* , ammmmazing, no hack required! I also had no problem figuring out how to get on my verizon 3G internet network with the i730, how to set up email, how to set up wireless sync, how to download and install a 3rd party chat client that integrates AIM, Yahoo, MSN and ICQ... Didn't have any problems with typing on my slide out keyboard either interstingly enough... Many of these things you'll never figure out how to do with an iPhone because, well... You simply can't do it with an iPhone.

I'm not an Apple hater, but I do think they charge quite the premium for their products, a bit too much for some to swollow (my self included). The iPhone does reportedly have the best LCD on the market which should be nice, and apparently for the most part it's very responsive which is nice too. But the fact that apple had to knock $200 off the price so soon after launch speaks volumns about how the market at large views the iPhone, an expensive gadget that they don't need *THAT* much. Not when verizon is selling i730's for $100 (yes, that's $100 total) which runs Windows Mobile 5, which means you get access to a huge library of 3rd party softare, good exchange integration etc.

RE: What is O2 thinking?
By Locutus465 on 9/19/2007 4:20:22 PM , Rating: 2
Ah yes, and because my iPhone has an off button I also won't have any trouble figuring out how to avoid a $4,800 phone bill while on vacation...

RE: What is O2 thinking?
By Locutus465 on 9/19/2007 4:20:59 PM , Rating: 2
Ah, crud.... I meant to say my i730... lol, too many phones that start with 'i'

"My sex life is pretty good" -- Steve Jobs' random musings during the 2010 D8 conference

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