Orange prepares its iPhone as Apple’s O2 deal ends

The mobile phone company Orange will start to sell the iPhone handset in the UK later this year after O2's exclusive deal with Apple comes to an end. Although no date has been announced for when the network will roll out the device, MacUser magazine reported earlier this month that the exclusive arrangement with O2 was coming to an end on October 9. Orange has already set up a website where potential customers can register their interest.

Orange has now announced a deal with Apple to offer the iPhone 3G and 3GS to Orange UK customers "later this year". The handsets will be available directly from Orange and in High Street stores.

O2 will continue to sell iPhones, and the move means that the UK will come into line with much of the rest of the world, where Apple did not limit the supply of iPhones to a single operator. [A major exception is in the US, where AT&T continues to retain sole rights to the provision of the handset.]

Apple is obviously hoping to shift more units with the move and Orange to gain fresh customers, but another article in MacUser suggests that the benefit to be gained by an operator from carrying the device is overstated. Danish market research firm Strand Consult published a report - 'iPhone - an operator's worst friend' - which suggested that networks get little back on their deals with Apple.

"We have not found one operator that has created shareholder value with iPhone," reported Strand, which specialises in research into the mobile phone market. "There's also no doubt that Apple has a restrictive policy regarding the iPhone. Not only do they want a kick-back from the data traffic generated by the phone, but they also keep the revenue from the iPhone-generated sales of Apple's own applications and music."

Editor's note: Since this item was posted, Vodaphone has announced that it too will offer the iPhone in the UK, however they will not be offering the product until the new year. ·