The Cutting Room


Finally, after two years of speculation and months of waiting, it’s on its way to the UK. The 8GB model will be available for £269 – a pretty hefty sum for one handset but, no doubt, most people won’t care less just because they’ve got possession of this much-anticipated gadget.

A lot has been missed in all the hype, and the new revenue share model on O2’s part. In fact, O2 should be heartily congratulated. Securing exclusive rights to the most anticipated and iconic handset is recent times is a coup. It has beaten strong competition in the UK for the contract.

And the revenue share model it has struck with Apple should be considered, not desperation, but far-sightedness. It recognises the influence of brand, for which the networks will never match the manufacturers, whatever O2’s own recent successes.

And all this talk of a 40 per cent revenue share. As one insider told Mobile News at the launch: “Forty per cent? Come on. Do they think we are stupid? We have had huge successes during the past five years. We are not about to give that away.”

The iPhone is the single product that could provide the tipping point for mobile data. O2 is right to take a risk. If the networks are really to make a success of consumer content provision, they have to break the mould.

Every other part of the industry is shaping up for change, and it is right that the manufacturer/network relationship is updated too.

O2 reckons it can lure 40 per cent of rival networks’ high-end users in the UK with the iPhone. It is not hard to see where this confidence comes from.

The hype and the Apple brand will contribute largely to iPhone sales and it will remain the hottest property in the market well into 2008.

Why? We checked the iPhone out when at the launch. It looks ultra cool. The touch-screen is a novelty that works, and works well. There are no clunky buttons. This is seriously slick and stylish engineering. It’s got 8GB memory too, which is enough for anyone except the achingly sad who carry every note of popular music recorded between Robert Johnson’s early blues and Britney’s latest pop outing.

Apple CEO Steve Jobs might have used the word “awesome” too much in his speech at the launch for Mobile News’ liking, but his argument about 3G was convincing: what’s the need for it if it’s only good for internet browsing, and Wi-Fi does it faster anyway.

There’ll need to be a cultural change if consumers across the country are going to hook up to Wi-Fi, but then the iPhone does that for them anyway.

O2, of all the networks, has played its brand the best. The relaunch of its brand a couple of years back, and the shedding of its stuffy old BT Cellnet clothes, was a masterstroke. The

O2, its updated version of the white elephant Dome, has proved a huge success. There were plenty of doubters for that too.

O2 chief executive Matthew Key said at the launch: “I’m very popular because of this. The number of people that have asked me for an iPhone is more than the number that have asked me for Led Zeppelin tickets.”