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O2 sells two million iPhones in the UK

Mobile network also says Palm Pre sales are strong

O2, Apple's original mobile phone partner in the UK, says it has sold two million Apple iPhones despite losing exclusivity to offer the smartphone last year.

Matthew Key, chief exec of Telefonica Europe, and Ronan Dunne, chief exec of O2 UK, said the company was still enjoying a boost from being the first operator to sell Apple's iPhone Reuters reports.

"It will take a long time before that goes away," Dunne said, who also noted strong sales and interest in the Palm Pre and expected the next set of trading results to show that O2 was the only operator to grow in the period.

O2 has sold two million Apple iPhones

O2 also claimed churn, the number of people who give up contracts, was better than rivals and the company had started to see improvements in the UK small business market, suggesting the economic downturn was improving.

O2 has offered the iPhone in the UK since 2007, but has since been joined by rival providers including Orange, Vodafone and Tesco Mobile, although the supermarket offers the iPhone in partnership with O2.

The news comes just a week after Vodafone revealed that it sold 100,000 Apple iPhones in the first week it was offering the handset.

The mobile network said half of the handsets had been pre-ordered before the smartphone's launch on January 15.

Macworld UK

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