Now Apple's long-awaited iPhone has arrived in the US, attention turns to which UK network will launch Apple's device later this year. So far the networks have kept tight-lipped, despite the iPhone being the biggest release of year.
Rumours abound that the network operators aren't happy with Apple's insistence on iPhones being lockable (meaning they'll only ever work on one particular network). And an iTunes Stores-based registration process, as used with AT&T in the States, may not be going down too well either.
However, the pot of gold for the first network to carry the iPhone exclusively will smooth over many concerns.
Speculation will reach fever pitch over the next six months, and once one network goes along with Apple's wishes, others will surely follow. But who will hit the jackpot - who will get the exclusive deal to carry it first?
iPhone in the UK
David Chamberlain, principal wireless analyst at In-Stat , suggests these conditions will determine 'the best candidate':
- A big network, perhaps number one or two in a territory
- An operator who might feel at a disadvantage from a marketing standpoint... enough to accept some of the stringent conditions demanded by Apple
- An operator interested in open access mobile internet, rather than 'walled garden' content services
- A company that sees 3G as useful but not mandatory
- An operator that is associated with Wi-Fi activities
- An operator that has a high proportion of contract subscribers
Of course, while these factors might help us identify the ideal UK operator partner for Apple's iPhone, we expect other strategic factors - not least the kudos of being first to carry the iPhone - could influence decisions. So how do the UK network operators stad at the moment?
Many write 3 off because of the iPhone's lack of a 3G chipset. By the time the iPhone reaches these shores it might well have 3G - indeed, some would argue it must have 3G to succeed in Europe. But this is currently only speculation.
- Strong mobile internet strategy based on branded services (e.g. iTunes?). 3 has moved away from its old walled-garden approach and is currently offering highly competitive flat-rate data deals
- Trendy, youth-oriented brand would sit well with Apple
- Like all networks, would welcome the coup of iPhone exclusivity - but only if it were a 3G iPhone
- iPhone is currently not 3G and Apple have given no indication that the first European iPhone will be 3G. 3 is a 3G network so a non-3G phone wouldn't fit the brand strategy
- 3 already has a strong music and video download service, and has been very successful with over-the-air downloads and other advanced mobile broadband services
- Relatively small consumer contract base on a European level, compared to other UK operators; Apple is thought to prefer one single pan-European partner for initial exclusivity
O2 is a good bet - some rumours claim Apple's already talking to O2's parent company Telefonica and some online retailers ( www.mobiles.co.uk and www.phones2udirect.co.uk ) have even started taking iPhone pre-orders on O2.
Lief-Olof Wallin, analyst at Gartner , sees O2 as a possibility: 'O2 needs something sexy in the shops like the iPhone.'
- Big on music branding - for example, the The O2 (the new music entertainment venue once known as the Millennium Dome) and its Wireless Festival, plus numerous promotional and sponsored music deals
- Wide European distribution through parent . Telefonica also offers a route into other non-European territories (such as Latin America)
- Has proved a willingness to embrace new technologies (such as i-mode and early trials of DVB-H mobile TV technology)
- O2 hasn't adopted a '3G at all costs' strategy, identifying customer experience as more important than pure technology
- Doesn't have the wide pan-European footprint of rival operators
Orange has wide European distribution potential, but it has already ploughed investment into its Music Player download service.
Gartner's Wallin reckons the iPhone won't fit into Orange's smartphone strategy even though it's a mobile music device: 'Orange is standardising its smartphones using Windows and other operating systems'. But noticeably not Apple's Mac OSX.
- Wide European reach
- A growing presence in the fixed line broadband market and a convergence strategy between mobile and fixed line devices
- Maintains a strong brand image whose values to consumers may overlap with Apple's own aspirational customers
- Has announced HTC's Touch (similar in design and capabilities to the iPhone) and has released many Windows Mobile-based smartphones
- Already has a successful mobile music download service (Music Player)
- Orange could demand to flash its own software onto Apple's iPhone as it has with many other devices. May not want to relinquish brand control it has maintained for years
Another good bet: T-Mobile was the first to offer open mobile Internet access and it's less concerned about its own music download services than its rivals - although it is just about to relaunch its music service.
'My gut feeling is T-Mobile,' says Gartner's Wallin. 'T-Mobile was the first to demolish its walled garden [Internet].'
Richard Windsor, analyst at Nomura International , agrees: 'I suspect, given the way Apple does business, T-Mobile will end up bidding the highest [for initial iPhone exclusivity].'
- Huge European subscriber base and strong branding in Europe. This would give Apple instant access to English and non-English markets
- Music has not been a key part of its content strategy so far - perhaps leaving room for leveraging iTunes on the service?
- T-Mobile was first to offer open access Internet - key to Apple's demands for the iPhone - and has sought to push the concept of full access to the internet on mobile devices through its web'walk service
- A significant Wi-Fi Hot Spot network throughout the UK and Europe
- European distribution covers fewer countries than some of its rivals
- Already has some Windows Mobile smartphones on its books (including the HTC Touch).
- Didn't get the iPhone first in the USA so maybe not that keen on the deal tabled by Apple
Sure, Vodafone has the customer base, the international distribution and the spending power to strike a deal with Apple. But it's not certain yet. Vodafone has its own mobile music ad content strategy based around 3G downloads - which the current version of the iPhone wouldn't necessarily support.
This is why some analysts like Leif-Olof Wallin have discounted Vodafone as a contender: 'The iPhone doesn't fit with Vodafone's [handset] profile, so it won't lead with it.' We'll have to wait and see who's right...
- Huge international presence. Great global network reach, with huge customer base spread across the world.
- Now offers open access mobile internet and is actively promoting its newly revamped mobile internet offering
- Online retailers already taking pre-orders on Vodafone-connected iPhones (e.g. www.mobiles.co.uk and www.phones2udirect.co.uk)
- Vodafone has a track record for tying up deals with third party companies to offer innovative services (such as Sky Mobile TV) and isn't afraid to pay the price
- 3G-based music download service is key to its content strategy (this might not fit comfortably with Apple's iTunes).
- Vodafone might insist on having its branding on iPhones, as it has with many other handset manufacturers
The Virgin Mobile virtual network is another possibility, albeit remote. It has a youth-oriented brand like Apple's, it's not fully embraced 3G services yet and it isn't focusing on a mobile music strategy. However, it lacks the size and bargaining power of rival networks.
- Trendy youth-orientated branding matching Apple's
- Not big on 3G, so could carry a GSM/GPRS iPhone
- Lacks financial bargaining power of other networks
- Doesn't have a large European footprint or Wi-Fi presence
- Relatively small contract base
- Would expect its own branding to be prominent on iPhones