According to Financial Times, Apple’s partners for the European launch of the craved iPhone are O2 in the UK, Orange in France and T-mobile in Germany.
The three companies have been included in the past on the list of “usual suspects” for Apple’s iPhone Euro-debut, but nothing has been confirmed until now.
Financial Times Germany however says that Apple has managed to lure the aforementioned telecom giants into signing a contract for iPhone’s distribution, according to which the carriers must share their iPhone-generated revenues with the Cupertino, CA-based computer manufacturer.
The deal allegedly stipulates that carriers will provide Apple with 10% of the revenues made from calls and data transfers by customers over iPhones.
Although Financial Times underlines that representatives of all sides involved in the breakthrough contract have declined to comment, it also says that we might see a final official confirmation at the upcoming IFA trade fair in Berlin, which debuts on August 29 and ends on September 6.
In mid-July, Macscoop.com reported that France Telecom-owned Orange is “not far from a deal with the maker of the most hyped gadget of all times. In fact, some insiders have suggested that a deal may already be signed.”
A week earlier, British carrier O2 (a subsidiary of Telefonica Spain) had denied rumors about an exclusive deal stricken with Apple, despite the fact that industry analysts favored Vodafone, world’s largest carrier, for the UK iPhone launch.
Actually, Vodafone was more concerned over the gadget’s lack of 3G capabilities. 3G networks are dominant in major European markets like Germany, France, UK or Spain and customers are strongly attached to the download speeds this type of technology offers. The same does not apply for the US, where free Wi-Fi networks are ubiquitous, but where the implementation of more advanced technologies like 3G or HSDPA (sort of a 3.75G) is far behind.
Arun Sarin, Vodafone’s CEO, was quoted saying: "The iPhone is clearly a good, software-driven device, but we're concerned about wideband area coverage. 3G (capability) is something we look forward to and hope Apple moves forward to soon."
According to Financial Times, the Euro-deal signed by Apple marks the debut of a new business model, where handsets manufacturers are given a direct share of the revenues a mobile phone operator makes from calls and data transfers. This could also spark a revolution (Apple is good at doing just that…), since other phone manufacturers could follow Apple’s lead.
The Cupertino behemoth has also inverted the subsidies business-model applied by most carriers throughout the world: usually, telecom giants buy large quantities of headsets which they later sell at lower prices. Sometimes, things go wrong and large amounts of headsets remain unsold. Apple will not allow this to happen with its iPhone, as such measure could decrease the gadget’s attractiveness and market value, but the move is also benefic for the mobile phone operators, which are in a risk-free situation.
Apple is generating a margin of 55% on each iPhone sold, according US market research company iSuppli. The production of the 8 GB version of iPhone costs around $265.83. Apple sells the phone for $600, leaving a profit margin of more than 55 per cent, but that does not include costs such as royalties or logistics.
Moreover, iPhone’s shine could also bring a refreshing new look on otherwise conservative brands like Deutsche Telekom’s T-mobile, which has a bad reputation when it comes to innovation and customer care. As if this wasn’t enough, the iPhone is said to boost carriers’ revenues because of the gadget’s target population: tech-savvy owners who spend a lot on calls and mobile Internet access.
So it’s somehow natural to see European operators desperately trying to get their hands on an exclusive deal: according to FT, Hamid Akhavan, chairman of Deutsche Telekom’s mobile business, campaigned for personal talks with Steve Jobs about the contract, while Peter Erskine, chief exeutive of O2, is said to have tried the same.
