Wednesday, April 16, 2008

U.K. Carrier Slashes Price Of iPhone

Wireless carrier O2 and Carphone Warehouse have slashed the price of the 8 GB iPhone in the U.K., following close behind even bigger discounts in Germany.

O2, owned by Spain's Telefonica, cut the price on Tuesday of the least expensive iPhone by 100 GBP, or about $197, to 169 GBP, or $333. In Germany, T-Mobile, owned by Deutsche Telekom, dropped prices earlier this month by about 75% to as little as 99 euros, or about $158, with the most expensive service plan.

France Telecom's Orange is expected to also cut prices soon, the Financial Times reported.

The price cuts apply only to the 8 GB iPhone and are in effect until June 1. The price of the more expensive 16 GB version remained unchanged. In the U.K., the larger capacity device was selling for 369 GBP, or about $648.

An Apple spokesman on Wednesday said the company was not involved in the O2-Carphone promotion. IPhone prices were unchanged at Apple retail stores.

The price cuts fueled speculation that carriers were draining inventories in preparation for a faster 3G iPhone, which some analysts believe Apple will release in June. The iPhone currently uses an EDGE radio, a digital mobile phone technology for increased data transmission rates over a cellular network. EDGE, however, is considered a 2.75-generation technology, versus a 3G technology, such as HSDPA, which is used in Europe.

Apple on Wednesday declined comment on the possibility of an upcoming 3G iPhone. "We don't comment on rumor and speculation," a spokesman said.

The recent price cuts also could be related to competitive pressures. There has been speculation that the iPhone isn't selling as well as expected in Europe, because of its slower data speeds and higher price. Rival smartphones with similar capacities as the 8 GB iPhone, such as Nokia's N95 and Sony Ericsson's W960i, are available at no charge with service contracts.


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