40% 02 iPhone deal is "madly money-losing"

Apple played dirty with all four UK mobile phone operators?

17 September 2007 9:56 GMT / By Amy-Mae Elliott

The Apple press conference on Tuesday 18th September is expected to be the UK launch of the iPhone, and to reveal which operator will partner with the computer company to offer the handset in the UK.

It's being reported as certain to be O2, and The Guardian has published information revealing some of the terms of the agreement, as well as behind-the-scenes details of the negotiating process.

O2, the UK's largest mobile operator, apparently "came from behind at the last minute" to seal the agreement with Jobs and co after Apple "played off" the four major networks (O2, Orange, T-Mobile and Vodafone) against each other in the race to bag the deal.

The four were so "played off" in fact, at one stage every operator thought that they had nabbed the exclusive deal with both Orange and T-Mobile allegedly going as far as to sign contracts at one point.

The Guardian reports that O2's deal with Apple, apparently described by a rival operator as "madly money-losing" will see 40% of any revenues it makes returned to Apple.

Previous industry estimates put this figure at closer to 10% and there is speculation that, at this margin, O2 will fail to make money from the device, even over the rumoured three-year period the contract runs for.

As we have previously reported, among many rumour stories about the iPhone's UK appearance, it seems Carphone Warehouse will be involved in the sale of the handset by offering a retail presence in the UK, "drafted in" as Apple did not believe O2 had enough high street stores.

All will be finally revealed on Tuesday 18th. Pocket-lint will be attending the Apple press conference and will bring you the news as it is announced.