EU carriers pay dearly for iPhone exclusive

This morning, Steve Jobs unveiled the iPhone that will ship in the UK on Nov. 9. As rumored since July, the iPhone is exclusive to O2. With an initial price of £269 and an 18-month contract, that works out to a £899 commitment ($1795) vs. $1799 over 24 months for the US phone after the price cut (but everything in London is more expensive).

There were a few interesting developments. Unlike in the US, the iPhone will not only be sold by the carrier and by Apple, but by a third party store, Europe’s Carphone Warehouse.

Somewhat surprisingly, it’s still only 2.5G, which Jobs blamed on the power consumption of 3G. (Is this inherent to 3G, or just the current implementations?) Despite all this, the interest crashed O2’s online stores, as buyers rushed to be the first to get an iPhone: the 1,500 visitors a second meant “the website has had more hits today than we normally do in a week.”

As predicted, the world’s largest carrier Vodafone refused Apple’s terms, and so Apple went with other carriers — O2 in the UK, Orange in France and T-Mobile in Germany; Jobs reportedly will be making the other announcements over the next two days. Interestingly, these are all the former national monopoly phone companies (BT spinoff O2 is now owned by the Spanish Telefonica monopoly).

The London Times reports O2 will give Apple 10% of the revenue from the iPhone, while the Guardian put it at 40%. (I suspect that’s for data revenues or profits, not the gross). Telefonica’s CEO aggressively fought to get the deal away from Orange and T-Mobile (both with big UK operations).

Also odd is that in June Orange sounded angry at Apple’s control of the music download market, but now (according to Le Figaro) is willing to pay Apple more than 10% of revenues for exclusive rights in France.

The Guardian said that the carriers were annoyed at getting pitted against each other to pay Apple the highest possible price — exactly as Apple did with Verizon and Cingular in the US. Students, what would we call this?

Photo from SlashGear.

Technorati Tags: Apple, iPhone, Orange, O2, Steve Jobs, T-Mobile