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O2 reports first UK iPhone sales figures

UK operator denies iPhone sales let-down

O2 has denied the claim that UK sales of Apple's iPhone bombed over the weekend, saying it sold "tens of thousands" of iPhones since the high-profile launch on Friday.

According to several blogs, UK sales failed to meet expectations, but O2 said early demand was strong and predicts it will sell "a couple of hundred thousand" iPhones over the Christmas and New Year periods.

Furthermore, the mobile operator O2 said two-thirds of iPhone buyers were new customers. There have also been reports that Vodafone's customer support lines jammed over the weekend as subscribers attempted to switch over to Apple's UK iPhone partner to get their hands on the new phone.

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Although O2 hasn't specified the exact number of iPhones sold over the weekend, demand was strong if the queues outside UK Apple Stores were anything to go by. Large crowds greeted the London launch of the device at the Regent Street Apple store. Similar scenes took place in Glasgow.

O2 and Carphone Warehouse shops across London were open late for launch day, and while the crowds weren't banging the doors down, small pockets of people could be seen purchasing iPhones.

See also:

Apple iPhone UK launch disaster

In the UK, O2 reportedly managed an expectation-breaking 8,000 iPhone activations on the first day of launch, and has confirmed it's on a five-year exclusive contract with Apple. While 8,000 activations have taken place, actual sales may have been higher.

Reports claim a 3G version of the iPhone shouldn't be expected before the end of 2008. Analysts note that the lack of 3G support may limit the impact of the first-generation of the device in Europe, where mobile-savvy consumers are used to the luxury of the standard.

The cost of the device may also prove its undoing in Europe. Ovum analyst, Jonathan Arber, said: "The relatively expensive contracts on offer with the iPhone will represent an attractive revenue stream over 24 months, but the high up-front and monthly cost and long lock-in could put off some users in a market where free handsets are the norm."

The analyst also criticised O2's UK EDGE coverage, which is currently at around 30 percent, though the company is upgrading its mobile towers across the UK to widen that coverage.

"O2 has pledged to increase this (coverage), it will take both time and a considerable investment. When you consider that sales and support investment will also be needed, it is taking quite a gamble on the iPhone's success," the analyst said.

Meanwhile early user reports on the iPhone suggest that some users suffering poor EDGE performance have been able to improve their signal simply by switching their iPhones off and on again.

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