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MacRumors
Oct 4, 2007, 09:32 PM
http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)

O2 UK and Apple are planning on launching a multi-million pound joint advertising campaign later this month according to a Reuters report (http://www.reuters.com/article/technologyNews/idUSL038246020071004).
O2 UK Chief Executive Matthew Key told a journalists on Tuesday it would be the company's "most significant campaign" in the run-up to the key Christmas trading period -- but that it would cost well short of 20 million pounds ($40.8 million).
Key believes that 80% of O2 UK's high-value customers wanted an iPhone while 40% of the higher-spending customers on rival networks are prepared to switch to get the iPhone.

Despite reports of generous revenue sharing back to Apple, the Key states the deal is "absolutely" profitable for O2.

Article Link (http://www.macrumors.com/iphone/2007/10/04/o2-to-launch-multi-million-pound-ad-campaign-for-iphone/)



/dev/toaster
Oct 4, 2007, 10:06 PM
Totally not trying to be flaming bait. I really wonder how many people aren't going to buy the phone when they heard about 1.1.1. I am not talking about unlockers, I am talking about legit customers.

iJed
Oct 5, 2007, 01:04 AM
Totally not trying to be flaming bait. I really wonder how many people aren't going to buy the phone when they heard about 1.1.1. I am not talking about unlockers, I am talking about legit customers.

Me for one. No third party software = no iPhone for me.

Devil's Refugee
Oct 5, 2007, 02:07 AM
The masses don't read these forums, so the proportion of people not taking it up on release will be small in comparison tbh

They'll be happy to have a phone which is light years ahead of the competition at the moment, and for want of a better phrase join the "one up-manship" brigade against their neighbour.

mclihah2
Oct 5, 2007, 02:27 AM
For my part, I was certainly going to buy the phone, but have now decided against it for the following reasons

- £50 per month is the effective cost! Therefore it needs to be really compelling.
- No 3G
- No GPS
- Locked Down (very limted apps, & I can't use my personal MP3s as ringtones!)
- 18 months contract - We know that iPhone 2 is already in the works, yet if I buy this in November, then I am effectively locked in until April 2009

This phone is unsubsidised, and locked to a carrier, for an 18 months contract. Basically these are all conditions that work against the UK consumer. In this country you can get the following kind of alternatives

- A free decent phone (like the Sony K850) for a 12 months contract..but with cashback. At the end of the 12 months, the overall cost works out to £0, inclusive of phone and decent tariff. This has been my favoured approach for the last 3-4 years.

- A free decent phone for a 12 months contract (from the shops) for a low monthly tariff.

- A free smartphone for a 12 months contract for a tariff comparable to the iPhone tariff (but usually more favourable to the consumer).

- A paid for phone or smartphone, but unlocked and free to do with what you want.

The iPhone offers the worst combination of the above. This is the kind of thing that one would expect from Microsoft, Universal or the RIAA.

At least in America, the iPhone is slightly competitive with what there is out there.

I personally believe that come February, when the Christmas rush has died down, O2 will find that the iPhone sales have flatlined, and they will have to revise their tariffs...That may be a good time to buy.. Although I am waiting to see what the 2nd generation iPhone will offer.

pogwilson@ntlwo
Oct 5, 2007, 02:51 AM
I want one. I have no issues with third party exclusions or being locked to O2. I expect Leopard's release to lead to a software update to add better PDA/Newton functionality to the iPhone. As a current Orange UK customer I'll have to switch to O2. Given the delays and quality control issues around the iPod Touch, I think I'll wait until the iPhone is out in the UK before giving Orange their 30 days notice. I'd be really pissed if 30 days later there were not enough iPhones to go around or that the few around had another week 37 screen problem. Waiting a little longer will also let me see if Leopard really can change the iPhone's spots ;)

elppa
Oct 5, 2007, 04:07 AM
I want one. I have no issues with third party exclusions or being locked to O2. I expect Leopard's release to lead to a software update to add better PDA/Newton functionality to the iPhone. As a current Orange UK customer I'll have to switch to O2. Given the delays and quality control issues around the iPod Touch, I think I'll wait until the iPhone is out in the UK before giving Orange their 30 days notice. I'd be really pissed if 30 days later there were not enough iPhones to go around or that the few around had another week 37 screen problem. Waiting a little longer will also let me see if Leopard really can change the iPhone's spots ;)

The difference is that iTouch was brand new, whereas iPhone has been in production since June, so any teething problems have likely been ironed out.

Piarco
Oct 5, 2007, 04:24 AM
Totally not trying to be flaming bait. I really wonder how many people aren't going to buy the phone when they heard about 1.1.1. I am not talking about unlockers, I am talking about legit customers.

Makes absolutely no difference to me. I'm not interested in 3rd party apps, unlocking or custom ringtones - the functionality that the iPhone offers is purely what I'm after. After all, people who bought the iPhone in the States on release knew that they couldn't install apps (as it stood at the time) and they sold bucketloads... so why should it be different now? The only thing I'd like on the iPhone in the future is a decent Satnav program, but if that doesn't materialise I won't be heart broken.
The only thing that worries me is the 18 month contract and the release time of the iPhone2.0... like mclihah2 states, I'd rather not be so locked into a contract that I can't upgrade. I'm hoping O2/Apple have something planned to allow existing iPhone customers to upgrade, even if it means an automatic contract extension.

moniker
Oct 5, 2007, 04:55 AM
I've had tons of isssues with O2 in the past (such as horrendeously expensive data plans and bad coverage in London, where I live) and ended up switching to T-Mobile, which has turned out to be great. There's no way I'll buy an iPhone as long as it is only available on O2.

Persifleur
Oct 5, 2007, 05:15 AM
I will be buying one on launch day (if I can find one...). I had an iPod touch for a week and a half with the "negative black" issue which I returned. While the screen problem was rather annoying, as a piece of technology it was excellent. The more I used it, the more I wished I had bought an iPhone instead. So rather than exchange my touch for another, I had it refunded with the intention of getting an iPhone. Here's hoping it lives up to my expectations.

emotion
Oct 5, 2007, 05:46 AM
I'm hoping O2/Apple have something planned to allow existing iPhone customers to upgrade, even if it means an automatic contract extension.

I think this too.

I'm likely to get an iPhone in the first weeks. The only fly in the upgrade ointment is if the 3G phone is available on network with decent 3G coverage (ie. not O2). That would ruin things slightly with contracts etc.

However I don't think we'll see a version 2.0 for another year (we'll see a 16GB upgrade at some point in the spring imo when 16GB flash chips become available, the Touch will go to 32GB at this point).

DogcowUK
Oct 5, 2007, 09:37 AM
I've personally held off renewing my current O2 contract since it expired in March, waiting for the iPhone. My only concern with the O2 deal is the fact O2 don't have an EDGE network and are apparently building one for the iPhone, with 30% UK coverage planned (hoped!) for launch. I very much doubt they will move beyond that 30% coverage figure, O2 have invested heavily in their 3G HSPDA network and I can't seem them wanting to build a 2.75G (or whatever) network just for a handset that will be replaced with a 3G upgrade within 12 months.

I'm quite happy to buy v1 on launch day, with the phone being un-subsidised swapping it for a 3G iPhone when it arrives should be relatively simple, the second hand value of the first iPhone should still be pretty good in 12 months too.

As for "no third party apps", well I'm not too bothered and don't believe it will be like that forever.

emotion
Oct 5, 2007, 09:44 AM
I've personally held off renewing my current O2 contract since it expired in March, waiting for the iPhone. My only concern with the O2 deal is the fact O2 don't have an EDGE network and are apparently building one for the iPhone, with 30% UK coverage planned (hoped!) for launch. I very much doubt they will move beyond that 30% coverage figure, O2 have invested heavily in their 3G HSPDA network and I can't seem them wanting to build a 2.75G (or whatever) network just for a handset that will be replaced with a 3G upgrade within 12 months.

Firstly, check at how low O2's coverage is for 3G in the UK, they may say they've invested but they have the lowest coverage of all networks.

Secondly, that EDGE network is just a software update to their GPRS network. Knowing that it's a surprise to see that they'll only commit to 30% coverage for the launch. Lack of EDGE in a lot of areas will certainly make O2 look bad when people actually have their iPhones.

Project
Oct 5, 2007, 09:52 AM
For my part, I was certainly going to buy the phone, but have now decided against it for the following reasons

- 50 per month is the effective cost! Therefore it needs to be really compelling.
- No 3G
- No GPS
- Locked Down (very limted apps, & I can't use my personal MP3s as ringtones!)
- 18 months contract - We know that iPhone 2 is already in the works, yet if I buy this in November, then I am effectively locked in until April 2009

This phone is unsubsidised, and locked to a carrier, for an 18 months contract. Basically these are all conditions that work against the UK consumer. In this country you can get the following kind of alternatives

- A free decent phone (like the Sony K850) for a 12 months contract..but with cashback. At the end of the 12 months, the overall cost works out to 0, inclusive of phone and decent tariff. This has been my favoured approach for the last 3-4 years.

- A free decent phone for a 12 months contract (from the shops) for a low monthly tariff.

- A free smartphone for a 12 months contract for a tariff comparable to the iPhone tariff (but usually more favourable to the consumer).

- A paid for phone or smartphone, but unlocked and free to do with what you want.

The iPhone offers the worst combination of the above. This is the kind of thing that one would expect from Microsoft, Universal or the RIAA.

At least in America, the iPhone is slightly competitive with what there is out there.

I personally believe that come February, when the Christmas rush has died down, O2 will find that the iPhone sales have flatlined, and they will have to revise their tariffs...That may be a good time to buy.. Although I am waiting to see what the 2nd generation iPhone will offer.


This is like saying your Mini is cheaper than a Ferrari.

Why not compare Apples to Apples?

Show me a phone with 8GB, 3.5" multi touch capacitive screen, full web browser etc that comes free on a 12 month contract with unlimited data below 35 a month. Find me just one, and I will rescind my point.

Yes, you can get cheaper phones.
Yes, you can get more texts/talk for 35 a month.

But can you find the overall packagae at that price? No you cant.

Is the iPhone for everybody? No.
Is the iPhone within everyones budget? No.
Is Apple competing against the K850 market? No.

You are making the same mistake people do when they compare Apple to Dell, by not looking at the overall picture (better built in software, awesome media experience, more expensive hardware etc).

Spanners
Oct 5, 2007, 10:12 AM
Ok, I have tried to let this one slide but I really have to refute some of these claims....

For my part, I was certainly going to buy the phone, but have now decided against it for the following reasons

- 50 per month is the effective cost! Therefore it needs to be really compelling.


Here I totally agree. I think however that the iPhone is exactly that - really compelling.


- No 3G
- No GPS
- Locked Down (very limted apps, & I can't use my personal MP3s as ringtones!)


Again I see the logic however, this sort of thinking means you'll never buy the newest toys because something better is just around the corner.


- 18 months contract - We know that iPhone 2 is already in the works, yet if I buy this in November, then I am effectively locked in until April 2009


Nope this just isn't true. You are locked in to O2 but not the handset. You can upgrade the handset whenever you like. Your money your choice.


This phone is unsubsidised, and locked to a carrier, for an 18 months contract. Basically these are all conditions that work against the UK consumer. In this country you can get the following kind of alternatives

- A free decent phone (like the Sony K850) for a 12 months contract..but with cashback. At the end of the 12 months, the overall cost works out to 0, inclusive of phone and decent tariff. This has been my favoured approach for the last 3-4 years.


Mmm I've tried these suposed "free" tariff deals. I've never found one that is actually free. They are complicated. If you miss a single window for submitting your bills you lose the the whole deal. The company delays in actually paying you any cashback till you've chased them round for ages. You know the score, you get nothing for nothing.


- A free decent phone for a 12 months contract (from the shops) for a low monthly tariff.


Yes this is true, however what could you do with the "best" free phone you can pick up for a "low" monthly tariff?? Bugger all. Certainly not WiFi/Touch interface/iPod and proper web surfing. No free Wifi access, no unlimited data package etc.


- A free smartphone for a 12 months contract for a tariff comparable to the iPhone tariff (but usually more favourable to the consumer).


Ok, here you do have a point. Still not an iPhone though.


- A paid for phone or smartphone, but unlocked and free to do with what you want.


Like what exactly? A HTC TyTN II? at 500? mmm I'm still taking the iPhone.


The iPhone offers the worst combination of the above. This is the kind of thing that one would expect from Microsoft, Universal or the RIAA.

At least in America, the iPhone is slightly competitive with what there is out there.


Again, I just can't agree. It's not the worst combo around and the fact it is a locked down system has no parallels with the RIAA or anyone else. It's just a closed system. When was the last time you tried to install 3rd party apps on your Nokia 6110?


I personally believe that come February, when the Christmas rush has died down, O2 will find that the iPhone sales have flatlined, and they will have to revise their tariffs...That may be a good time to buy.. Although I am waiting to see what the 2nd generation iPhone will offer.

As I was always told, as long as you state "Your opinion" you can never be wrong. However I really don't think they will revise anything.

Just my 2p worth.

emotion
Oct 5, 2007, 10:21 AM
This phone is unsubsidised,

I wouldn't be so sure on that fact.

It's clear if you look at the Touch and the iPhone that for equivalent money you get quite a bit more for your money with the iPhone. Things like the dock etc too.

I'd guess that either Apple or ATT/O2 subsidize the phone to acertain level. If that's Apple then that's predicated on the fact they get money from the monthly bill. Hence the lock.

As much as I'd like Appe to have approached this differently I understand why they've approached it like this.

bilbo--baggins
Oct 5, 2007, 01:12 PM
I've just switched from Vodafone to O2 to try out the network for a month before the iPhone comes out. Coverage is fine for me - so I'll certainly be getting an iPhone. As long as it's core functionality works well (phone calls, visual voice mail, calendars and address book) I'll be happy. I've never found web browsing to be very useful on my previous smart phones - so if the iPhone really is much better (regardless of download speeds) then it will be a bonus. 3rd party apps or ringtones aren't important to me - though it does seem a bit odd not supporting ordinary mp3 clips for ringtones. Having music as a ringtone is just a gimmick as far as I'm concerned.

emotion
Oct 5, 2007, 01:55 PM
3rd party apps or ringtones aren't important to me....

Well even that's looking up:

http://forums.macrumors.com/showthread.php?p=4286777

TPALTony
Oct 5, 2007, 03:12 PM
I wouldn't be so sure on that fact.

It's clear if you look at the Touch and the iPhone that for equivalent money you get quite a bit more for your money with the iPhone. Things like the dock etc too.

I'd guess that either Apple or ATT/O2 subsidize the phone to acertain level. If that's Apple then that's predicated on the fact they get money from the monthly bill. Hence the lock.

As much as I'd like Appe to have approached this differently I understand why they've approached it like this.

In the US, the phone is unsubsidized. The downside of that is the price.

The upside is that you were NOT required to wait till your existing contract ran out if you were an AT&T customer. In my case, I was only 1 year into my 2 year contract and I was still able to upgrade. You have to sign up for "another 2 years" but you were not penalized in any way.

So when iPhone 2 comes out, I'll do the same thing. AT&T won't care, they sign me up again and didn't have to subsidize the device to get me to do it. Apple won't care because they get me for another 2 years AND the sale of the new device.

If the UK works like the US did, then assuming the price is tolerable, you should be ahead of the game with an iPhone compared to the alternatives, at least from the contractual comittment / upgrade to iPhone 2 perspective. :-)

be well

t

emotion
Oct 5, 2007, 03:29 PM
In the US, the phone is unsubsidized. The downside of that is the price.


I'm asserting that it is indeed subsidised in the US and in the UK.

aapl.jlo
Oct 5, 2007, 08:44 PM
<<sarcasm>> they need advertising for a product that even someone under a rock has heard of? Come on!!! It's unnecessary for Steve to do this. After all, he is the master of getting free publicity-i.e. this website.

elppa
Oct 6, 2007, 03:50 AM
<<sarcasm>> they need advertising for a product that even someone under a rock has heard of? Come on!!! It's unnecessary for Steve to do this. After all, he is the master of getting free publicity-i.e. this website.

They need to counter some of the negativity a lies about the product e.g.

"the LG Prada is an iPhone alternative" :D

Project
Oct 6, 2007, 04:45 AM
The iPhone is not subsidised.

The 8GB iPod Touch is 199.

So for 70 more, you get the:

GSM radio (15)
bluetooth (2)
speaker (0.5)
2 mpx camera (5)

Anything else? That is perhaps just over 20 worth of components. Apple almost certainly has slightly smaller margins on an outright purchase of the Touch than the iPhone, but they recoup that and more in monthly revenue.

emotion
Oct 6, 2007, 11:01 AM
Apple almost certainly has slightly smaller margins on an outright purchase of the Touch than the iPhone, but they recoup that and more in monthly revenue.

Exactly. That's a form of subsidy. Glad you agree with me.

marcol
Oct 6, 2007, 11:21 AM
The iPhone is not subsidised.

The 8GB iPod Touch is 199.

So for 70 more, you get the:

GSM radio (15)
bluetooth (2)
speaker (0.5)
2 mpx camera (5)

Anything else?
A couple more: microphone, volume buttons, ringer switch, proximity sensor, different headphones (with mic and button). Casing (size and materials) is different too and the screens are I believe not quite the same size. Batteries may differ too?

dontwalkhand
Oct 6, 2007, 11:53 AM
Would these run in addition to the ads Apple has? Watching the UK keynote, the same ads from the US would be there, but tailored for UK customers.

CD3660
Oct 7, 2007, 01:40 AM
I would imagine that they will just show the normal Apple ads (adapted for the U.K.) with, perhaps, a brief postscript that they are available only on o2.

Project
Oct 7, 2007, 07:30 AM
A couple more: microphone, volume buttons, ringer switch, proximity sensor, different headphones (with mic and button). Casing (size and materials) is different too and the screens are I believe not quite the same size. Batteries may differ too?


+ another 15 to the BoM. The phone is still unsubsidised.

Exactly. That's a form of subsidy. Glad you agree with me.

No it isn't. Its revenue sharing.

lofight
Oct 7, 2007, 07:34 AM
it's alot of money, it's going to be a pretty big campaign.

emotion
Oct 7, 2007, 07:37 AM
No it isn't. Its revenue sharing.

Yes and they use that revenue sharing arrangement to subsidise the price of the iPhone.

You surely must be able to see that?

psychofreak
Oct 7, 2007, 07:48 AM
This is going to bring a massive amount of people into the already-packed Apple Stores...they really need to open up new ones...

Project
Oct 7, 2007, 08:17 AM
Yes and they use that revenue sharing arrangement to subsidise the price of the iPhone.

You surely must be able to see that?

Look up the definition of a subsidy.

Given the price of the iPod touch, the iPhone's 269 is clearly NOT subsidised. Apple is clearly not making a loss on the sale of the iPhone at that price. The revenue share is an agreement for Apple to make more money on the iPhone per month... that is not a subsidy. It is revenue.

In the traditional phone market, the cost of the phone is subsidised in order to tempt users to buy into the agreement. The subsidy is recouped on the monthly contract. The complete opposite is happening with the iPhone.

emotion
Oct 7, 2007, 08:27 AM
Given the price of the iPod touch, the iPhone's 269 is clearly NOT subsidised.

All I'm saying is that neither of us can have a definitive answer to that. Only Apple know that.

However, if Apple are keeping the price artificially low by using the revenue sharing money, that is how the subsidy is possible for them. Via the route they've taken.

Simple.