The iPhone comes to Tesco — will a price war follow?

Next Story

Sad-Eyed TiVo of the Low Subscriber Rate

[UK] Is an iPhone price war about to break out? After Vodafone and Orange bagged the iPhone – after O2’s two year monopoly expired in September – we learn today that Tesco, the UK supermarket leviathan, is to sell the iPhone on Tesco Mobile, its MVNO joint venture partnership with O2.

Both iPhone 3G and iPhone 3GS handsets will be sold in Tesco Phone Shops and online through Tesco Direct in the UK, possibly before Christmas. There’s even a pre-regsitration website – but it’s showing a 500 Internal server error. [Update: You can now get to pre-registration here].

Tesco Mobile focuses on the low end of the market with voice and text, and we’re told the prices will be “competitive”. But there is no word yet on data packages, which is something of a necessity where the iPhone is concerned. As an MVNO, Tesco has a fairly free hand regarding the the markets it goes after – and this is usually a market O2 itself is less interested in targeting as it tends to concentrate on higher value customers. O2 says it has sold over one million iPhones since September 2007.

Could it be possible that Tesco might offer a deal which forces the larger players to discount? Now that would be interesting.

Furthermore this move fires yet another starting gun on the iPhone app race. As if it was hard enough to find an iPhone app developer in the UK prior to this, with the mainstream approval of the Tesco iPhone, it certainly will be now.

  • Every Little Helps as Tesco set to sell the Apple iPhone on Pay As You Go | The Daily Dust | UK News | Good News

    […] of the digital hat to Mike Butcher and TechCrunch Europe. Share This […]

  • Karl Freeman

    Not to be a pessimist about this joint venture but surely this will only weaken 02’s previous monopoly? Allowing Tesco to dictate a price point that is suitable to their consumer base for the iPhone should be interesting to see but its more than likely their data plan will simply piggyback 02’s network which can only be bad for current 02 customers.

    Lets see what “Every little helps” and “We’re better connected” actually does for current consumers apart from rip apart iPhone’s average price plan.

    • Mike Butcher

      Interesting point – yes, O2’s network could well take a pummeling from a bunch more Tesco iPhone users coming on stream. We’ll just have to see I guess.

    • Steve O'Hear

      I don’t think this will lead to significant price reductions. Apple won’t want to de-value the iPhone brand and exercises tight controls over pricing. Unless Tesco is going down the grey market road, expect Apple to have a big say. Cupertino will decide when/if the iPhone should start to take a slice of the next price-point layer of the smartphone market. And when/if they do, it will be the start of the nightmare that handset makers who compete fear most.

      • turley Muller

        Apple doesn’t necessarily control pricing, only at the wholesale level. The carriers and resellers set the end-user price. Some carriers sell the iPhone for $50 or even free, so it’s not a question of devaluing the brand by allowing it to be sold at too low of a price. Apple

      • andrew

        are you sure Apple don’t control the pricing. you look back at the pricing of the iPod. this was sold through hundreds of retailers and still their prices was pretty much the same as the on-line Apple store price. very rarely would you see discounted iPods on sale. well in australia anyway.

  • raam

    Competition – good.
    Monopoly – bad.

    Therefore this is good. No?

    And beware all those that under-estimate Tesco.

  • Roger Nolan

    > As if it was hard enough to find an iPhone app developer in the UK prior to this, with the mainstream approval of the Tesco iPhone, it certainly will be now.

    I don’t understand this point. Why does more handset volume mean less developers?

    • Pete Austin

      I think he means *available* developers

      • Roger Nolan

        That still doesn’t make sense. More handsets means a bigger market means more developers. Maybe not instantly but this can only be good news.

      • zuk1

        sigh, he means more app developers will be working on projects for companies and thus not available for employment.

      • zuk1

        but yeh it’s a pretty stupid thing to say and poorly worded..

  • zuk1

    LOL @ Tesco being called the walmart of the UK…

    You do realise we have a shop called ASDA which is owned by Walmart and is the literal equivalent?

    • PaulH

      Maybe it was the easiest way to frame what Tesco is (major supermarket with fingers in many pies) in the minds of US readers.

      • Sarah

        I LOLd too, Tesco is nothing like Walmart :D … let alone Asda actually IS Walmart

      • Gilligan BenetRamsey

        Clearly when communities like this refer to Walmart, the implication is cheap, low-brow mass retailer. And when we’re talking about our beloved iPhone, we clearly are implying our fave device is going down market.

        Tesco in my mind is the Nordstrom’s of grocers, that has been extending in to retailing, taking on their competitor Marks and Spencers.

        We’ve nothing like it in the States. and the Walmart superstores are NOT fair comparisons. A walk down the prepared foods section of M&S is a wonder. Prepared food and most groceries are the ONLY things cheaper in the UK than the states.

    • ZachL

      Totally agree! Tesco is the somewhat more budget conscious of the two major supermarket chains in the UK (the other is Sainsbury’s). While there is no exact equivalent for Tesco (UK supermarkets are generally smaller than U.S. supermarkets, especially in cities, and sell a wider variety of non-food products) the closest U.S. equivalent would be something like Safeway or Kroger.

  • Tony

    Bemused by the comment around weakening O2’s monopoly, when Tesco Mobile is a JV between the two companies, so they share revenue/margin, and both benefit. The competition are Vodafone, and Orange surely?

    I would like to think that someone at O2, the infrastructure supplier, has done their capacity management modelling against bandwidth increase…

    • Lee Bandoni

      The UK version of Walmart is eh…. Walmart. I have aphoto of the big sign to prove it lol

    • Karl Freeman

      “I would like to think that someone at O2, the infrastructure supplier, has done their capacity management modelling against bandwidth increase…”

      I would like to think so too but if you look at Offcoms coverage map ( ) published earlier this year you can see that in comparison to other services 02’s 3g coverage clearly cannot cope with even more consumers.

      We can only but hope :)

  • deavy

    this might be of some interest: Petpalsdirect are giving away 2x 5th Generation 8gb Ipods. Last draw is on 21st of december. check their facebook page:

    • Thomas M

      Thinly veiled spam. People like this should be permanently-banned.

      • deavy

        it isn’t “thinly veiled spam”, Thomas. i have always been reading tech crunch. and my pet insurance company just informed me that they are offering a similar thing up for their competition. i just thought it would be of interest.
        christ sake.

      • Thomas M

        deavy: A similar thing to what exactly?

        How is a competition giving away iPods (A frankly common occurrence these days) the same vein of news as Tesco moving to sell iPhones? Maybe it’s just me but they don’t seem to be similar at all.

  • Adam

    Tesco does not equal a UK Walmart.

    Tesco is more like a gas station, with an attached convenience store selling things at low prices to draw in the traffic.

    • zuk1

      Tesco also have large convenience stores not attached to petrol stations much like Walmart, you obviously just don’t live by any.

    • deavy

      dude, tesco have massive superstores everywhere in the uk. where do you live, man?

  • http://@Rentlord Colin Tan

    Apple fluked out with the App Store’s popularity. Attracting more developers to develop for it now (through mass-distributing the iPhone) is just the first step on its way to Cloud computing, possibly with the Tablet, but most definitely future iterations of OS X.

    Makes you think about that patent on Ad-distribution they had taken out: coming soon — Affordably-priced App(le)Books running Apple ads, driven by apps, on an OS X Cloud platform.

    Unfortunately Google seems headed the same way too.

    • Roger Nolan

      I’m not sure you can say the AppStore was a fluke. It was built on the same model as iTMS and the iTunes TV both of which are successes too.

      Because of that success, and the related success and tie in of the UIKit APIS, I don’t think Apple will move to cloud computing anytime soon. Google are different. Android is a platform for delivering adwords and the cloud is a much better way to do that.

      • Colin Tan

        I believe they had meant the AppStore as an extension their existing iTunes services at the time, possibly as a means of diversion and even add-on utility to the iPhone. But I think even Apple is surprised with how popular Apps have become, and I think they might be changing their business model to being more App-centric.

        Remember this?

        Could be just an idea they’re toying with… it would be crazy going up against Google. But here I’m saying it: Apps are going to get bigger, better and more expensive, and become Apple’s primary way of collecting pocket change.

      • Ted Lanfret

        But keep in mind, Apple is very ANTI-advertisement anywhere with the OS, so this was a defensive patent, not something they’ll ever use.

  • Charbarred

    I’m not sure I understand this. Tesco is re-selling the iPhone for O2? How is this different than any other store that sells any phone for any network? These kind of deals happen every day.

  • deavy

    apple= ipods, iphones etc. similar?
    how about brought-you-by-the-same-people.

    yes, i do admit there are a lot of scam-y sites out there offering free ipod this, free iphone that and yes, it is a common occurence now these days so i dont blame your suspicion.

    its just a matter of me doing a spur of the moment thing, putting two and two together: i was reading tech crunch and happened to remember a previous news about a similar iphone/ipod thing. thought i’d share. there’s no harm in that. its perfectly human. i’m sorry it it upset you somehow becuase that wasn’t the intention.

    • Jeff

      So… it sounds like you know you posted spam.

    • pukerocket

      So the company you buy pet insurance from….you use their Facebook page as your homepage? And you’re a happy customer spreading some good news?

      Bullshit. Piss off

  • modelportfolio2003

    The data plan issue is important as the UK has a fair use limit of 500 mb per month. Exceed it and your browser speed drops way down, making it difficult to surf the net. Many iPhone and Android users need more bandwidth….for example, watching a film or tuning into BBCiPlayer can easily use up 40 mb in one hour use, unless you can use less by going wi-fi rather than 3G network. Carriers in UK are real monopolists and this “fair use” limit is an example of it….they should just upgrade their networks. Ever hear of cap ex?

  • iPhone Comes to British Retailer Tesco | Erictric

    […] to begin sometime before the holidays, though no specific date has been outlined. According to TechCrunch Europe, both the iPhone 3G and 3GS will be sold through Tesco Phone Shops and online through Tesco […]

  • Rod

    Morning everyone. I know many people that use the iPhone with very little extras. For some a basic plan-make calls, only use WiFi, and do not surf the net. So a basic plan and hopefully with a good price might be the just the ticket for some.

  • Mark

    Guys you seriously need to change your headline. Tesco is not like Walmart. We have Walmart in the UK and Asda is also owned by Walmart. I live right near a WalmartAsda Superstore and I can assure you it is nothing like Tesco Extra (the equivalent)!

    • andrew

      like someone has previously pointed out, the head line is more a reference for Americans to get some idea of what Tesco is. no its not exactly like Walmart and yes ASDA is a closer example, but it give the non UK readers some idea.

  • James

    Mark, Tesco Extra and Express are their little stores. They have huge stores as well, some selling even more stuff than Asda. Huge one near me at Silverburn in Glasgow that sells everything from TVs to running machines.

    My local mini tesco does not sell any electronics and won’t after this I suspect. I think the headline is fine.

    • pukerocket

      Sorry to join in this retarded conversation about Tesco. It’s just depressing with numerous people making errors, then numerous other people trying to fix those errors, yet still screwing up.

      “Tesco Extra stores are larger, mainly out-of-town hypermarkets that stock nearly all of Tesco’s product ranges”

    • Chris Mills


      Tesco Extra is the Tesco hypermarket.

      The format is Tesco Extra = hypermarket
      Tesco Superstore = supermarket
      Tesco Metro = largeish local shop (like a co-op in size)
      Tesco Express/One Stop = corner shop supermarket.

    • Chris Mills

      I don’t think this will do that much.

      They claim their plans and prices would be competitive… So did Orange. And they were. Competitive can = similar. My guess is that there won’t be that much difference in price.

  • iPhone

    nice decision for buyer … It’s better for price I think.

  • drivers

    Entrambi i telefoni sono grandi. in realtà dipende da cosa ha intenzione di utilizzare per, per e-mail e le imprese, SMS, etc, per applicazioni e le cose sono più regolari quindi probabilmente iphone. Io personalmente sono di proprietà bb per circa 4 anni e appena li amano. iPhone ha pro oltre il BlackBerry e in questa generazione, la gente sembra dimenticare ciò che conta.

  • paul m

    i just done some xmas shopping at my local tesco,bought a mountain bike,42” samsung lcd,32” goodmans lcd,dvds,a few cd’s,my groceries,cigs,a £10 top up for my son and a,and i woulda bought an iphone but they only had ipods.

  • paul m

    i just done some xmas shopping at my local tesco,bought a mountain bike,42” samsung lcd,32” goodmans lcd,dvds,a few cd’s,my groceries,cigs,a £10 top up for my son and a,and i woulda bought an iphone but they only had ipods.oh and i left the store at 4.30am

  • Aly Amin

    We are distributor in all kinds of latest Cellphones & PDA, All our products are brand new Unlocked (Original) sealed in box with complete accessories and it comes with 1 year Warranty and 8 months Return Policy.

    PROMO: Buy 2Units And Get 1 Unit FREE

    Carrier: AT&T (GSM based), T-Mobile
    Technology: 3G EURO Standard, Quad Band 850/900/1800/1900

    3Gs Apple iPhone 32GB (Unlocked) at $300USD

    Apple iPad 64GB Wifi at $330USD

    Nokia N900 Internet Tablet (Unlocked) GSM PHONE at $360USD

    Blackberry Bold 2 9700 (Unlocked) at $280USD

    HTC Google Nexus One (Unlocked) at $290USD

    Sony Ericsson Xperia X10 (Unlocked) at $310USD

    Contact us as below :

    Tel: +1 740-395-0130
    MSN: techmob213

  • Marcus Wood

    xmas sales on brand new unlocked 4g apple iphone 32gb at $300 with complete accessories and compatible with network operator perfectly.

    see contact info below **
    tel: +12192325277
    skype: pa.2008

  • iPhone News Of The Week | apprupt

    […] The iPhone will be sold in the UK equivalent of Walmart – what are the implications? […]

  • Move over iPhone – 2011 will be “the year of the Android”, says British supermarket

    […] and British supermarket Tesco, caused quite a stir back in late in 2009 when it announced that it would be selling Apple’s iPhone in its stores and online. And while Tesco Mobile’s pricing of Apple’s premium […]

  • ralph lauren polos

    thx your sharing ,i learn a lot form it

blog comments powered by Disqus