02 drops cost of iPhone. Slow sales perhaps?

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Amid rumours that the iPhone has not been selling as well as hoped in the UK, O2 has decided to make the packages for low and mid-tier iPhone owners somewhat cheaper. The £35 tariff customers will get up to three times as many free calls and text messages for the same price, while it is phasing out its existing £55 per month deal, moving customers to the equivalent £45 per month contract instead. The high-end tariff, costing £75, will give users 3,000 minutes and 500 texts. The £269 cost of the iPhone itself remains unchanged as does the 18 month contract. Meanwhile it appears that a million iPhones mysteriously missing from Apple’s sales figures are most likely to be handsets which are being shipped by the truck-load to Asia where they are unlocked. My own experince of meeting iPhone owners in the UK is that the handset is almost always unlocked, except where the bill is being paid for by their company. As most UK iPhone owners know, you can get better deals than the ones on offer from O2, hence the incentive to unlock the thing. In addition, the iPod Touch, now with its new productivity apps like email, is probably eating into iPhone sales as well, given that it comes without a contract.

  • Wills

    o2 improved bolt-ons and the simplicity tariff so most likely this was to keep iPhone prices in line with the rest of o2s offerings

  • http://dotneil.com Neil

    I must admit to being a little confused by O2’s iPhone activation process. An O2 rep told me I could buy the iPhone in store, take it out the store without a contract, and configure the entire tariff at home. Is this true? If so, doesn’t this make it incredibly easy to just buy an iPhone and unlock it at home (completely bypassing the part in which O2 makes money)?

  • http://www.broadstuff.com alan p

    Hah! Predicted it in Nov, thought it would happen in April-May though…..

  • Wills


    Yes, I bought mine from the Apple store, didnt sign anything. Unboxed it, connected it to iTunes and activated it there. Great experience.

    It also makes it incredibly easy to buy the phone and unlock it. Hence why there are reports of there being as many as 1 in 3 iphones unlocked.

  • Bri

    I know five people with iPhones, including myself, and no-one has bothered unlocking them – I’ve asked them why, and they all replied with answers along the lines of: ‘what’s the point?’

    If I went to another network, I might be better off by a fiver a month – is it worth the hassle to risk bricking my phone next time I update iTunes?

    Also, I understand I’d lose some functionality, such as Visual Voicemail and the way in which text messages are displayed, which is one of the benefits of having the phone in the first place!

    I’m not sure who Mike Butcher has been speaking to – it seems that some people just want to unlock the iPhone just for the sake of it, to prove that they can ‘do it’!

  • Mike Butcher

    Bri – Thanks for those thoughts, which are actually very salient. This is probably the same reason I have not unlocked my iPod Touch – it’s just too useful as a working device rather than one which may or may not fully work in the way it’s supposed to. One iPhone update later and who knows what would happen. I guess this is why Apple stand out from the entire consumer tech crowd – they can actually control the device long after you left the store, but promise more functionality later on. Evil but mutually beneficial. Like a pact with the devil.

  • http://uk.techcrunch.com/2008/02/05/16gb-iphone-today/ TechCrunch UK » Blog Archive » 16GB iPhone today?

    […] put in a call to 02 but we’ll see after 1.30pm I guess. But will it be enough to stem problems over sales of the high-priced mobile? I doubt it – it seems UK customers just don’t like paying through […]

  • AMak

    Unlocking the iphone is a very good idea, as it give far more flexibilty and improves on the current functionality you have with a brand new iphone. You can use any network of your choice, you can install any of a thousand new aplications being released daily, some more useful than others… soon there will be a bluetooth app that allows file transfer on an iphone which apple should have included in the first place. even if you do update the phone through iTunes, you can always re-unlock. You can simply cancel updates and still use iTunes if you wanted. In my opinion there is no good reason to keep your phone locked. How many people use visual voice mail? why doesn’t the phone come with picture messaging instead? You can add that functionality with easily installed 3rd party applications…same as SMS display functionality…plus tons of other features like Video Camera, a camera that can zoom in and out unlike the one you get with the phone…

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