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O2's UK iPhone sacrifices revealed

Tough terms for exclusive Apple iPhone deal

O2's determination to win the exclusive deal to offer the iPhone in the UK has forced the mobile operator to agree to a number of concessions, according to The Guardian.

Various reports claim Apple and O2 will finally announce a UK distribution deal for the iPod/mobile phone hybrid tomorrow after months of speculation that has also seen Vodafone, Orange and T-Mobile touted as potential UK iPhone partners. T-Mobile is believed to have secured the rights to sell the handset in Germany, while Orange is likely to offer it in France.

According to The Guardian, O2's UK agreement will see the mobile operator give Apple up to 40 percent of its iPhone revenues. O2 has also agreed a revenue sharing deal with Carphone Warehouse, which The Guardian says will be the "sole independent retailer" for the iPhone in the UK, while Apple has the right to change the iPhone's price at any time. Apple announced a price cut for the iPhone in the US earlier this month.

Apple's tough terms for European iPhone distribution rights reportedly upset a number of mobile phone operators earlier this year (see – Arrogant Apple’s iPhone woes), with Vodafone apparently dropping out of negotiations in the summer.

See also:

Apple iPhone review


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