iPhone coming to Orange as Apple ends its mobile monogamy

O2 loses exclusive rights to device

The iPhone is coming to Orange in the UK - ending two years of exclusivity with O2.

O2 will continue to sell the iPhone 3G and its faster brother the 3G S but both devices will also be available to customers on Orange's network, starting sometime later on this year.

While no further details are available on how much the device will cost, what tariffs it will be available on or its launch date, Orange has already announced a pre-registration site for potential iPhone customers to log their interest.

Dave McQueen, principal analyst at Informa Telecoms and Media, said the deal with Orange is good for Apple as it increases the company's addressable market - with the potential for a serious step up if the recently announced proposed merger between Orange and T-Mobile goes ahead.

"If the Orange and T-Mobile joint venture goes through then three out the top four [operators] will be able to have the iPhone in the UK... it could go to round about three-quarters of the UK," he said.

McQueen added there are now only two markets where the iPhone isn't carried by more than one operator - Germany and the US - so today's announcement brings the UK in line with Apple's global strategy.

Ian Fogg, principal analyst at Forrester Research, added: "When you look around the many countries where the iPhone is on sale, in most of them it is already available through more than one operator so I don't think this is a surprise. That initial long-term exclusive with O2 I presume has now run out - it's in Apple's interests to get iPhone widely available to maximise the sales for iPhone in each country."

An O2 spokesman said in a statement: "We always knew that iPhone exclusivity was for a limited period of time but our relationship with Apple continues and will be an ongoing success. We have over one million iPhone customers and they remain very important to us."

The deal will weaken O2's ability to woo customers from other operators, according to Forrester's Fogg. However, there are other ways for the operator to differentiate itself, he said - pointing to its exclusive deal to bring the Palm Pre smartphone to the UK later this year.

"I think there's a strong parallel with Apple's strategy when they launched the [first generation] iPhone," he added.

Asked about the deal an O2 spokesman said: "Our relationship with Apple has always been on the basis of a two-year exclusivity period," he said. Asked whether the company believes the 2007 iPhone deal was good value for money, the O2 spokesman added: "We're very happy with our relationship with Apple and the two year exclusivity we had on the iPhone."

Will business adoption of the iPhone increase now the device will no longer be locked to a single operator? Informa's McQueen reckons there could be a bump in the SME sector but said there are still barriers to adoption in larger enterprises where integration with back office systems is vital. "That's what Apple probably can't provide," he said.

"When it comes down to even PC penetration - most people have got Windows-based PCs rather than Apple Macs. So I think [the iPhone will] still be fairly niche. I don't see a tidal wave going into the enterprise but it could be used for various types of [SMEs]," McQueen added.