O2 scoops last minute iPhone deal

O2 has got it hands on the iPhone for the UK launch. The announcement is expected at an Apple special event being held in London tomorrow

It looks like O2 has beaten its mobile network rivals to bring the Apple iPhone to the UK. O2 got the deal because it was the only one that didn't baulk at Apple's extremely costly terms - under the deal Apple will get 40 per cent of everything O2 earns.

Carphone Warehouse has also been brought in to bolster O2's efforts to sell the iPhone. It is alleged that Apple didn't believe O2 had enough high street presence to ensure that the iPhone sold well, says The Guardian.

O2 may have secured the Apple deal, but the last few months have also seen Vodafone, Orange and T-Mobile named as exclusive partners - these rumours are all part of Apple's brinkmanship apparently, designed to get the best possible deal for itself.

iPhone as loss leader

Vodafone apparently pulled out early when it emerged that Apple wouldn't be handing out exclusive deals on the iPhone to any single network for the whole of Europe. Many believe that O2 won't make a penny out of the iPhone for the next three years - it is, in effect, a loss leader for the mobile network.

The Guardian story confirms something else that many would-be iPhone purchasers will be disappointed by - that O2 has been spending oodles of cash on its EDGE network ahead of the iPhone launch, not that 3G was ever on the cards this side of Christmas.