1/30/2008 2:24:00 PM
O2 finally sweetens iPhone deal
There was a certain inevitability about the news that O2 is upping the minutes and texts on the iPhone. Bringing deals in line with tariffs on O2’s other handsets is something the operator has done belatedly, after laying itself open to accusations of greed. The move against convention and introducing a cost price for a contract handset, rather than ‘free’, was widely praised. Operators, manufacturers and retailers have yearned for consumers to recognise the true value of handsets for some time. ‘Finally, a handset that customers are willing to pay for,’ one retailer said at the time.
But to push such an onerous tariff at the launch - 200 minutes and 200 texts for £35, when the industry standard (and O2’s standard) was between 400 minutes and 600 minutes, appeared to be opportunistic and optimistic at best, and downright greedy at worst. It has to be said that the hand of Apple and Steve Jobs in the iPhone proposition was more noticeable than O2. In fact, O2’s reputation for fair and clear pricing could have been damaged by the anomaly between its iPhone tariffs and tariffs on other handsets.
Two months on and the results have been revealing. O2’s expectation that stores would be selling three or four iPhones per day has not materialised. Instead stores typically report around one iPhone sale per day. One Carphone source said that a typical region was hitting around 25% of its iPhone target. O2, Apple and Carphone will be hoping that the tariff correction will bring back those consumers who had a look at the iPhone, liked it and baulked at the value from the tariff. But there is a high probability that, with the mellowing of iPhone hysteria since November, sales won’t be what they could have been now that pre-Christmas excitement has been replaced by post-Christmas belt-tightening.