NEWS: Vodafone Cooling on iPhone for UK

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spacerog

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Jun 11, 2007
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#1
Vodafone cooling on the iPhone?
http://web20.telecomtv.com/pages/?newsid=41575&id=e9381817-0593-417a-8639-c4c53e2a2a10&view=news

Vodafone is known to be interested in negotiating an exclusive deal to distribute the iPhone in the UK and was an early favourite to do such a deal – but in the past couple of weeks O2 has also emerged as a strong contender.

Personally I think this is just postering by the various companies in the UK to get a better deal for themseelves for iPhone than AT&T got. Obviosuly Apple is now in the drivers seat and the local cell companies don't like that.

- SR
 

Sleeper

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Jul 21, 2007
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#2
Sorry, but that's simply not the case. The European market is different from the American market and, as such, the big players need to be sure that any device they sell will be profitable. Having done their analysis Vodafone have come to the conclusion that Apple's terms are currently not acceptable for them as a businesss. Voda's CEO has made this point clear in recent interviews.

Given that the European markets expect 3G as standard - you don't invest billions in something if you're not going to use it - are fragmented, predominately pay as you go and the expectation of the custmer is that handsets will be subsidised I think Apple will need to be very conscious of what they're delivering as it's a much harder market to crack than the American one.
 

spacerog

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#3
I'll admit I don't know a lot about the UK market but after looking at the US release and the demand that I know exists for iPhones imported to Europe _today_ despite the lack of any cell service or being forced to pay roaming charges I have to look at the iPhone, as is, as being a money maker for whichever cell company gets the contract.

Non-Subsidized phone? Non-issue. Look at the US market where people expect all cell phones to be free, and here comes a $600 phone that people are buying by the hundreds of thousands. No 3G? they said the same thing about the US, EDGE is to sloooww, waaah. Doesn't seem to stop people. While 3G is more prolific in the EU it is by no means widespread.

Now look at demand, almost all of the iPhones on eBay are being sold to overseas purchasers. All of the overseas people where I work (about 10 or so, from Italy to Tunisia, to Dubai to London and Paris etc...) have ALL asked me to buy them and ship them an iPhone. I don't know what they are going to do with them since they won't be able to activate and even if they do they will be hit with roaming charges out the wazzzooo. The demand is definitely there.

So what is the Vodaphone CEO doing by saying that the iPhone lacks specific features and technologies? He is trying to get a better deal from Apple. He is trying to convince Apple that there is some risk involved with rolling things out to the EU and that Vodafon should be compensated for assuming that risk. Even though he knows he will make money hand over fist on the iPhone and that the actual risk is minimal. he wants the percived risk to be high so that he can force a better deal out of Apple.

This is all just posteruing and negotiations. Pretty standrad for most industries and is basic Marketing 102. (ok, maybe Marketing 201).

- SR
 

Sleeper

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Jul 21, 2007
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#4
I agree with what you said there to a degree and there is undoubtedly a demand for the iPhone in Europe, the question is if that demand will turn around sufficient profits for the big carriers given the nature of the European market.

Voda are of course angling for what they can get - they'd be stupid not to - but every bit of angling is based on the bottom line. If they can't make more money out of the iPhone than they can flogging other manufacturer's phones then it's a dead duck.

As for 3G, it is pretty widely spread in the key European areas (mostly the big cities and towns) and is seen as pretty much essential. Remember, the carriers have made a massive capital investment in this technology and need to recoup that expense. To promote a device that doesn't use 3G or HSDPA would be suicide.

I expect the iPhone to be 3G compatible when launched here. I don't think that some of the other bugs are quite so important - no GPS won't really be an issue as the phone is aimed at the young, affluent urbanite, for example - but speed of access will be.