Apple’s worst kept secret revealed

Apple frontman Steve Jobs and O2 UK’s Matthew Key were the CEO double act Tuesday morning at Apple’s flagship store on Regent Street, London, where an iPhone announcement as predictable as Jobs’ wardrobe (black turtleneck, jeans, stubble) was made.

It was revealed that the UK’s biggest mobile carrier had signed an exclusive multi-year deal, which even Key described as, “the worst kept secret” in O2’s history.

The iconic iPhone will launch in the UK November 9 and will retail at £269 on £35, £45 and £55 per month tariffs, with all subscribers tied into 18-month contracts.

The most interesting point of the announcement is that all tariffs will include unlimited data, meaning O2 will finally be catching up with its peers to offer a flat rate, all you can eat, data plan. The fair usage policy for data equates to around 1400 web page impressions per day, according to Key.

O2 will launch its flat rate data plans on October 1.

Not surprisingly, neither Jobs nor Key would be drawn on the subject of revenue share. It is rumoured in some quarters that Apple will take a cut of between 20 – 40 per cent of all revenues generated on the device, both data and voice.

As with the US, the UK device is EDGE and wifi-enabled. According to Jobs, this is mainly due to the fact that 3G chipsets are “powerhogs”. The Apple chief expects the situation to improve “late next year”, which we can assume is the timeframe he has in mind for the launch of 3G iPhone.

O2’s Key suggested that the carrier’s network would be “north of 30 per cent” EDGE-enable at the time of launch, but would not be drawn on the level of investment required for the roll out. However, Key also added that, “we expect two out of three usage cases will be over wifi.” O2 already has a deal with wifi provider The Cloud that will give iPhone customers seamless access to 7500 hotspots around the UK.

Key would not divulge any subscriber targets but did say that market research had suggested that 80 per cent of the carrier’s high value customers would be interested or very interested in getting the device. While 40 per cent of subscribers from the operator’s UK rivals said they would consider switching provider in order to get their hands on an iPhone.

Of course, since its launch in the US, the iPhone has been successfully hacked and ported to other GSM networks, so switching operator is not an absolute necessity. Jobs said, “With these hackers it is a constant game of cat and mouse. I’m not sure whether we’re the cat or the mouse here, but as with the iPod’s DRM, it’s something we’re always looking at.”

The high UK price of the device was also defended by Jobs, who pointed the finger of blame in the direction of VAT and the “high cost of doing business over here”. The price will come down over time, he said: “There are no guarantees in technology. There will always be new models and price reductions. If you wait to buy always looking over the horizon, you’ll never get anything. I can guarantee that there will be price changes,” he said, contradicting himself nicely.

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