UK iPhone price war expected as Apple signs up Vodafone

Californian electronics manufacturer Apple continued its push to get the iPhone out to the mass market on Tuesday, with Vodafone UK and Ireland set to introduce the device in early 2010.

This latest move makes it more than likely that all the UK mobile operators will be offering the device by next year, and probably pre-empts a price war over the iPhone.

Informa principal analyst Dave McQueen, said that pricing would now be of the upmost importance with the UK iPhone market set to turn into a free for all. In fact, only the US (AT&T) and Germany (T-Mobile) have held onto iPhone exclusivity agreements to date.

But in the UK, the proposed merger between Orange and T-Mobile will also be of importance as it’s thought that the move would give the new entity a data optimised network to better handle all that extra iPhone traffic and compete on Quality of Service rather than pricing.

Although Chris Larmour, chief marketing officer for network engineering firm Actix, does not think the merger to be of importance due to overlap between Orange and T-Mobile’s networks. “Network coverage is built up in areas of high demand,” he said, “So the first thing the two operators will do is remove cell sites where they have overlap.”

Larmour noted Ofcom’s recent 3G coverage maps, which showed the UK operators up as having “pathetically weak networks.

“Data load is growing exponentially, and over 50 per cent of network traffic is now data,” Larmour said. “And on 3G it’s trickier to add capacity. If you add more cells you get more interference, so you need to make the network more efficient, make it work better.”

Larmour reckons operators are hitting capacity on their 3G networks only because of their configuration and there is plenty of headroom still available, “We could squeeze 30 per cent more out of existing hardware,” he said.

On Monday, Orange UK announced that it too will be offering the iPhone 3G and 3GS before Christmas. This could also mean proposed network partner T-Mobile (and its network partner 3) also get the iPhone, making the device available to the entire UK population by early 2010.

In related news, Apple this week said that more than two billion apps have been downloaded from its App Store, where there are now more than 85,000 apps available to the more than 50 million iPhone and iPod touch customers worldwide. There are more than 125,000 developers in Apple’s iPhone developer program, the company said.