Apple will partner with U.K. mobile carrier O2 when it rolls out the iPhone in Great Britain on Nov. 9, the company said on Tuesday. Contrary to speculation, however, the smart phone will not use the faster 3G data network common in Europe.
CEO Steve Jobs announced the partnership with O2 UK at one of Apple's London retail stores, and set the price of the iPhone at US$537, which includes value added taxes (VAT). O2 will offer three different subscriber plans, called "tariffs" in the U.K., that range from $70 to $110 monthly. Those plans include 200 to 1,200 calling minutes, and 200 to 500 text messages in their allotments.
The price of the iPhone will be the stickiest problem Apple faces in the U.K., said Carolina Milanesi, a Gartner research director, speaking from London after Jobs' presentation. "We're terribly spoiled in the U.K.," she said, talking about handset subsidies. "Here, a 400 to 500 euro phone becomes a 100 to 150 euro device [with subsidies]. I really think that consumers will need to be educated about the iPhone" before they'll buy.
As in the U.S., the iPhone accesses the Internet using its built-in Safari browser, and pulls e-mail from multiple accounts. All three O2 tariffs offer unlimited data access.
Questions about data, particularly the network speed, came up almost immediately during the Q&A with Jobs and O2 UK's CEO, Matthew Key. Although some pundits and analysts had gone out on a limb and speculated that the iPhone might be modified to work with 3G, the faster data standard that's widespread in Europe, the U.K. iPhone will use an EDGE (Enhanced Data Rates for GSM Evolution) network when outside the range of a Wi-Fi hotspot, just as it does in the U.S. O2's Key acknowledged that his network will have EDGE coverage available in only 30% of its calling area by the time the iPhone goes on sale.
Jobs, meanwhile, said that Apple didn't make the iPhone 3G-capable because of power concerns. "The 3G chipsets are real power hogs," Jobs said, according to an account posted in real-time by Engadget. "Our phone has a talk time of eight hours and that's really important when you want to use your phone for Internet and music. 3G needs to get back up to 5-plus hours, something we think we'll see later next year."
To plug the data gap, O2 said it had partnered with Wi-Fi provider The Cloud, and would provide unlimited free access to 7,500 public access points at the iPhone's November debut. An unlimited account with The Cloud is currently priced at $13.95 monthly.
The Wi-Fi addition is crucial, said Milanesi, to the iPhone's success in the country. "The deal with The Cloud and the hotspots across the U.K. will minimize concerns," she said. Even the iPhone's reliance on EDGE networks isn't a deal killer for most consumers; a lot of the touting of 3G and the dismissal of EDGE has been overblown.
"There is some awareness of 3G, for example, not because it's faster than EDGE, but because the latest phones are on 3G," Milanesi said. "So when someone wants the latest and greatest device, then they might ask for 3G."
Jobs also parried questions about iPhone unlocking, which has been accomplished with both free and commercial software in the U.S., freeing the device from the single approved carrier, AT&T. "It's a constant cat-and-mouse game," Jobs said of unlocking. "We have to stay one step ahead of them."
Apple has not officially commented on unlocking success, but previous updates to the iPhone have disabled earlier hacks.
