UK's O2 places orders for "hundreds of thousands" of iPhones

[AppleInsider]

O2, the largest mobile carrier in the UK and exclusive provider of Apple's iPhone for the region, says it expects the touch-screen handset to become its fastest selling phone yet when it goes on sale this Friday at 6:00 p.m.

Speaking to the Financial Times, O2 chief executive Matthew Key estimated a "a couple of hundred thousand" iPhones would be sold in the first two months, adding that his firm along with its retail partner have ordered "hundreds of thousands" of units from Apple in preparation for the Nov. 9 launch.

Carolina Milanesi, an analyst at Gartner, found Key's forecast to be on the conservative end, and instead believes between 350,000 and 400,000 iPhones could be sold in the UK by January. Part of that success will have to hinge on O2's retail partner in the region, Carphone Warehouse.

In a separate interview with the Telegraph, Key recalls openly admitting to Apple chief executive Steve Jobs that O2 would need to use Carphone Warehouse as a retail partner to maximise distribution if it were selected as the exclusive iPhone carrier for the UK.

Key's openness reportedly chimed with Apple, which later revealed to have already mystery-shopped all O2's stores in the UK -- something Jobs also did for himself before Apple formally announced its intention to use O2 as its exclusive provider for iPhone in the region.

"He's a hugely impressive guy, hugely impressive guy," Key said of Jobs. ''He clearly knows his stuff in a level of detail that for someone at that level is mindblowing, and he has a great incisiveness in terms of what the customer wants and needs in products."

The O2 chief said he knew immediately after his first two-hour meeting with Jobs that iPhone was a device he absolutely had to offer to his customners.

"In the UK market, where the top four networks have pretty much equal shares, it offers a great way for me to get a hell of a lot of high-value customers on to O2 and drive up data usage," he said.

[ View this article at AppleInsider.com ]

[anantksundaram]

Well, even if the low end of this forecast comes to pass, I'd like to see what all our snotty/snooty "3G+GPS+5MP+MMS+3rdParty-or-bust" pals in the EU have to say!

[e1618978]

[Yoda voice] Jobs is strong with the RDF force, he is [\Yoda voice]

[hdasmith]

According to MacUser.co.uk, O2 have also removed the "fair usage policy" for data !

I'm in the UK with a 3G phone, and would switch off 3G if I knew how. I just don't need it, and with free access to The Cloud, I'm thinking 3G is even less important. Looking forward to Friday.

What's with this "region" talk as well? Makes it sound more like a state of the EU. Whilst our politicians might be pushing for a United State of Europe, the people are protesting. The UK, whilst made up of four countries, is itself a country as well.

[Fishyesque]

I look forward to seeing how well it does.

[mstone]

Originally Posted by hdasmith

What's with this "region" talk as well? Makes it sound more like a state of the EU. Whilst our politicians might be pushing for a United State of Europe, the people are protesting. The UK, whilst made up of four countries, is itself a country as well.

Is the fourth country Northern Ireland? Is O2 releasing iPhone there as well?

[Rot'nApple]

Originally Posted by hdasmith

What's with this "region" talk as well? Makes it sound more like a state of the EU. Whilst our politicians might be pushing for a United State of Europe, the people are protesting. The UK, whilst made up of four countries, is itself a country as well.

Hear! Hear!

While being a U.S. "mutt" myself, for a lack of a better term, my mother, God Rest her Soul, was UK born and bread. While a Greencard alien here in the USA, she took great pride of her natural birthplace (born in Nottingham and raised in Bedford), English Ancestry and the Queen!

My only downside is that half my "family" is 3000 miles away and while a phone call, card or letter is nice, sadly, it still is not the same as being able to get in the car and 'drive' to grandmothers house or visit an aunt, uncle or cousin.

Cheers to all who will be in line for O2's iPhone launch! Being iPhoneless myself (personal reasons), I do enjoy it's wonders when visiting my local Apple Store.

[Gitterati]

... when it goes on sale this Friday at 6:00 p.m.

In fact, the signs in O2 stores says it goes on sale at 6:02 p.m. on Friday.
Get it?

[Hattig]

Getting a bit sick of AppleInsider's Advertising Popups - Porn now ... lovely.

[doemel]

Originally Posted by Hattig

Getting a bit sick of AppleInsider's Advertising Popups - Porn now ... lovely.

There's nothing like porn to spice up our boring lives, eh?

[mstone]

Originally Posted by Hattig

Getting a bit sick of AppleInsider's Advertising Popups - Porn now ... lovely.

Pretty much, every browser has popup blocking.

[backtomac]

Originally Posted by hdasmith

I'm in the UK with a 3G phone, and would switch off 3G if I knew how. I just don't need it, and with free access to The Cloud, I'm thinking 3G is even less important.

I don't know much about the Cloud but it sounds like a huge benefit we don't have here in the states with ATT. Free wi fi access is still difficult to find at times.

[nmcphers]

Originally Posted by Hattig

Getting a bit sick of AppleInsider's Advertising Popups - Porn now ... lovely.

You probably have some spyware on your computer that's causing that.
Besides all the major web browsers support Pop-up Blocker. You can also install yahoo or google toolbars that have that function. Can't believe there are people out there still being plagued by Pop-ups.

[anantksundaram]

Originally Posted by Gitterati

In fact, the signs in O2 stores says it goes on sale at 6:02 p.m. on Friday.
Get it?

Cool. It could have been worse: 0202 hours....

[aduzik]

Can someone clear this up for me? Does O2 not have their own retail stores like the cellular companies in the US do? Is this why they're partnering with Carphone Warehouse? I'm assuming Carphone Warehouse has a huge presence there?

For the first time, the iPhone is going to have to compete side-by-side in the same retail space not just against other phones from the same provider, but also against other networks altogether. That's going to be interesting to see.

[hdasmith]

Yes, O2 do have their own retail stores, but in the UK Carphone Warehouse is widely regarded as the best place to buy a new mobile as they are very good at giving impartial advice. They are very big here, whereas private retail stores are not seen as often, and used even less so. Without the Carphone Warehouse, roll-out would be less.

On another note, been told by someone who works at Carphone Warehouse that Apple have completely shafted O2 and Carphone Warehouse. All profits from the contract go straight to Apple, with O2 only making money if we go over the agreed plan. Carphone Warehouse would normally get £12 for every new contract, but with the iPhone, they're only getting £3. That's how desirable the iPhone is over here to companies.

[eAi]

O2 do have their own stores, but not as many stores as Carphone Warehouse do. Carphone warehouse sell phones and contracts for most of the networks, so this has the advantage for O2 and Apple of putting the iPhone alongside every other phone from all the other networks.

[aegisdesign]

Originally Posted by anantksundaram

Well, even if the low end of this forecast comes to pass, I'd like to see what all our snotty/snooty "3G+GPS+5MP+MMS+3rdParty-or-bust" pals in the EU have to say!

Whether it sells 200,000 or a million, it still doesn't change the fact it's feature-lite, restricted and way, way, way overpriced.

Incidentally, on Ars they were reporting that the iPod Touch was to get free WiFi access via The Cloud.

Roll on February.

[Walter Slocombe]

Originally Posted by hdasmith

What's with this "region" talk as well? Makes it sound more like a state of the EU. Whilst our politicians might be pushing for a United State of Europe, the people are protesting. The UK, whilst made up of four countries, is itself a country as well.

I think you will find that those 4 countrys make up a Union hence the term United Kingdom which is not a "country"

[aaarrrgggh]

Originally Posted by mstone

Pretty much, every browser has popup blocking.

As well as ad blocking.

Notable exception is that little iPhone. Really makes me hate AI when I am on the road!

[mrtotes]

Originally Posted by Hattig

Getting a bit sick of AppleInsider's Advertising Popups - Porn now ... lovely.

Safari menu > Block Pop-Up Windows

Now that wasn;t so hard. I suspect AI has limited control over exactly which ads appear.

[DCJ001]

Originally Posted by mrtotes

Safari menu > Block Pop-Up Windows

Now that wasn;t so hard. I suspect AI has limited control over exactly which ads appear.

It would be nice if Safari would add the ability to add exceptions to blocking pop up windows like FireFox has.

[hdasmith]

It's a union of countries, but because of our parliamentary system, it can itself be considered one country.

[Hattig]

Originally Posted by mstone

Pretty much, every browser has popup blocking.

Quite a few of the pop ups on this site are bypassing Firefox's popup blocker.

It's really unprofessional and makes the site look sleazy.

[Hattig]

Originally Posted by nmcphers

You probably have some spyware on your computer that's causing that.
Besides all the major web browsers support Pop-up Blocker. You can also install yahoo or google toolbars that have that function. Can't believe there are people out there still being plagued by Pop-ups.

I don't use IE. Stop making excuses for AppleInsider, it is only this site that has them - on the article pages - and whilst Firefox catches 90% of them (with the message at the top of the webpage), a few squirm through, including said porn popup.

[Carniphage]

Originally Posted by aduzik

Can someone clear this up for me? Does O2 not have their own retail stores like the cellular companies in the US do? Is this why they're partnering with Carphone Warehouse? I'm assuming Carphone Warehouse has a huge presence there?

There's an insane amount of phone shops in the UK with the anachronistically named Carphone having the biggest presence.

As an example, in my local shopping mall, I will be able to buy the iPhone at:

1) The Apple Store
2) The O2 Store
3) Carphone Warehouse in the Arcade
4) Carphone Warehouse in the High Street!
5) Carphone Warehouse in the Oasis!!

I won't be able to buy the iPhone at

The Orange Store
The 3 Store
The Vodafone Store
The TMobile Store
The Phones 4u store
or Argos

It's also worth pointing out that are all fully-fledged units - not the hand-cart style mini-shops you see in US malls.

One of the Carphone staff said that their store would be getting 500 units. So I might just be able to find one.

C.

[addabox]

Originally Posted by hdasmith

Yes, O2 do have their own retail stores, but in the UK Carphone Warehouse is widely regarded as the best place to buy a new mobile as they are very good at giving impartial advice. They are very big here, whereas private retail stores are not seen as often, and used even less so. Without the Carphone Warehouse, roll-out would be less.

On another note, been told by someone who works at Carphone Warehouse that Apple have completely shafted O2 and Carphone Warehouse. All profits from the contract go straight to Apple, with O2 only making money if we go over the agreed plan. Carphone Warehouse would normally get £12 for every new contract, but with the iPhone, they're only getting £3. That's how desirable the iPhone is over here to companies.

Well, given that O2 and Carphone Warehouse agreed to these terms (I'm assuming Carphone Warehouse wasn't obligated to carry the iPhone), I think they were less "shafted" than "made a business decision based on what they perceived the potential profits to be."

If they are forgoing revenue stream by one means and didn't see a way to make that back and more by other means, they would never have agreed to deal with the iPhone in the first place.

There always seems to be a lot of talk about how Apple is screwing over partners, as if the iPhone had been mandated by law and the poor carriers and retailers were forced to accept Apple's horrible, lopsided terms or face being brought up on charges.

[physguy]

Originally Posted by aegisdesign

Whether it sells 200,000 or a million, it still doesn't change the fact it's feature-lite, restricted and way, way, way overpriced.

Incidentally, on Ars they were reporting that the iPod Touch was to get free WiFi access via The Cloud.

Roll on February.

1) It DOES mean its NOT overpriced. Over priced means too high to sell. This is real value pricing - charging what a market believes its worth.

2) It doesn't wash my dog either - doesn't mean it feature-lite, just means its 'feature-accurate' - having what the market really wants.

We'll see, but I'm betting sells really well.

[Carniphage]

Originally Posted by aegisdesign

Whether it sells 200,000 or a million, it still doesn't change the fact it's feature-lite, restricted and way, way, way overpriced.

Change the fact?

If a device sells well, it *cannot* be over-priced. Over-Priced means people don't buy it because they don't see the price being worth the benefit. For instance the lamentable PS3.
Markets are clever like that.

As for "feature lite" - Feature-by- feature comparisons seem to be some unwritten law of gadget physics.
LAW 1 - Device A is always better than Device B where Device A has more features.

You hear it all the time...
"The Zune is better than the iPod because it has a squirting feature."
"My WindowsMobile phone has had web browsing for years. What's so cool about the iPhone?"
"The lack of MMS is a deal breaker for me!"

What a crock! One good feature, properly implemented, is worth a hundred crapware features shoehorned into a device.

It's funny that the market gets this. People respond to great design and excellent implementation by spending hard cash. But pundits and geeks don't get it.

C.

[bavlondon2]

The problem though isnt the lack of maybe 1 or 2 minor features its many.

Not being able to forward sms, inability to cut and paste text, inability to record video or blog, inability to use your own music as a ringtone. Its a great product but Apple didnt do themselves any favours and im not even mentioning 3G.

The other factor is the rubbish price plan. If you want to give data fine then do it as an add on but dont take out voice minutes and text. £35 for 200 minutes and texts is pathetic. You can get triple that for less than the same price and still get an unlimited data add on for £5-£10 a month.

Im sure it will sell ok but I dont think its going to create the shit storm Jobs is expecting. He clearly hasnt researched the EU market enough.

[Carniphage]

Originally Posted by bavlondon2

The problem though isnt the lack of maybe 1 or 2 minor features its many.

Not being able to forward sms, inability to cut and paste text, inability to record video or blog, inability to use your own music as a ringtone. Its a great product but Apple didnt do themselves any favours and im not even mentioning 3G.

Forwarding SMS - there's deal breaker!

Here's one feature the iPhone has: It does not suck.
That's it. The entire feature set that matters.

My Sony Ericsson has IMap email, records video, plays music, browses the web. I can even use my own music as a ringtone. I can put crappy Java games on it. Features galore, But here's the thing: It's utterly rubbish. It sucks at them all.

The web browser is so lame as to be unusable. The Imap client has an invalid security certificate. There's no way to organise music. Video quality is execrable.

The entire mobile phone industry has been trundling on for years. Making lousy products and arguing that adding features equates to making their products better. Thank goodness that Apple is going to make them think again.

C.

[physguy]

Originally Posted by bavlondon2

The problem though isnt the lack of maybe 1 or 2 minor features its many.

Not being able to forward sms, inability to cut and paste text, inability to record video or blog, inability to use your own music as a ringtone. Its a great product but Apple didnt do themselves any favours and im not even mentioning 3G.

The other factor is the rubbish price plan. If you want to give data fine then do it as an add on but dont take out voice minutes and text. £35 for 200 minutes and texts is pathetic. You can get triple that for less than the same price and still get an unlimited data add on for £5-£10 a month.

Im sure it will sell ok but I dont think its going to create the shit storm Jobs is expecting. He clearly hasnt researched the EU market enough.

There's an international conference here in San Diego this week that I was attending (Society for Neuroscience). I can tell you that at least half of the UK people I met with were planning to be at an O2 store on Friday to get an iPhone. They were very please with the Phone, pricing and data plans. I think Apple has done their research quite well, especially by ignoring the 'expert' users.

BTW bav, its November.

[hdasmith]

Originally Posted by addabox

Well, given that O2 and Carphone Warehouse agreed to these terms (I'm assuming Carphone Warehouse wasn't obligated to carry the iPhone), I think they were less "shafted" than "made a business decision based on what they perceived the potential profits to be."

If they are forgoing revenue stream by one means and didn't see a way to make that back and more by other means, they would never have agreed to deal with the iPhone in the first place.

There always seems to be a lot of talk about how Apple is screwing over partners, as if the iPhone had been mandated by law and the poor carriers and retailers were forced to accept Apple's horrible, lopsided terms or face being brought up on charges.

Fair point. But it does go to show that Apple have something that people really want, and despite the premium. Here's hoping it works out well for everyone. I'm certainly trying to get one on Friday in Newcastle.

[TenoBell]

Its a great product but Apple didnt do themselves any favours and im not even mentioning 3G.

How quickly we forget. When Jobs announced the phone in the UK he said the iPhone would get 3G around late 2008.

[aegisdesign]

Originally Posted by physguy

1) It DOES mean its NOT overpriced. Over priced means too high to sell. This is real value pricing - charging what a market believes its worth.

Bullcrap. The market isn't deciding a price here. There's only one seller and one price - Apple and O2. Buyers have the choice of buying it or not. They don't have a range of prices depending on their plan. They don't have a range of plans. They don't have a range of carriers. They barely have a range of retailers (O2, Apple and Carphone Warehouse).

By all measures - ie. other handsets, retailers and other plans, it's expensive. There may be people out there willing to pay that much but don't pretend market forces are deciding the price here or that it isn't expensive.

Originally Posted by physguy

2) It doesn't wash my dog either - doesn't mean it feature-lite, just means its 'feature-accurate' - having what the market really wants.

'the market' isn't the buyer. It's 'some people' where 'some people' = people who only need a subset of a modern phone's functionality, don't mind the missing bits and can afford the price and 18 month plan. Or it's people who must buy the latest fashionable gadget. Or whatever. It's not however 'the market'.

Originally Posted by physguy

We'll see, but I'm betting sells really well.

Define 'really well' ?

200,000 doesn't seem much like 'really well' to me.

I hope it doesn't do 'really well' and it gives Apple pause for thought.

Originally Posted by Carniphage

Change the fact?

If a device sells well, it *cannot* be over-priced. Over-Priced means people don't buy it because they don't see the price being worth the benefit. For instance the lamentable PS3.
Markets are clever like that.

The Nokia based Vertu phones sell well too. Are they overpriced? I'd say so. Yet people are still prepared to pay for an S40 based Nokia in a shinier case with a fashion brand attached.

The PS3 outsells the Xbox360 2-to-1 in the UK btw and only a few thousand less than the Wii.

Originally Posted by Carniphage

As for "feature lite" - Feature-by- feature comparisons seem to be some unwritten law of gadget physics.
LAW 1 - Device A is always better than Device B where Device A has more features.

When did I say more features were better?

I simply said the iPhone was light on features for the money. It's up to you if you think a lack of features is an advantage or not. I'm sat here with a one button mouse as I prefer it to multi button mice so I'm not adverse to simplicity in interfaces either.

Some of us however need features. I _need_ an ssh client on my phone. No ssh, no sale. I can live without pretty much any of the other restrictions. I'd prefer it on Orange too as I use Orange's two lines on one handset functionality.

Originally Posted by physguy

There's an international conference here in San Diego this week that I was attending (Society for Neuroscience). I can tell you that at least half of the UK people I met with were planning to be at an O2 store on Friday to get an iPhone.

Queues of brain surgeons? What do they know?

[TenoBell]

The market isn't deciding a price here. There's only one seller and one price - Apple and O2. Buyers have the choice of buying it or not. By all measures - ie. other handsets, retailers and other plans, it's expensive. There may be people out there willing to pay that much but don't pretend market forces are deciding the price here or that it isn't expensive.

But that's what it means for a market to assign value. If people are willing to buy a service especially when there are cheaper alternatives the market has decided the service was worth the price it was sold for. If the market does not feel the service is worth the price few people buy it.

[aegisdesign]

Originally Posted by TenoBell

But that's what it means for a market to assign value. If people are willing to buy a service especially when there are cheaper alternatives the market has decided the service was worth the price it was sold for. If the market does not feel the service is worth the price few people buy it.

And it would appear few people will be if O2's CEO is only expecting 200,000 in the run up to Xmas. That's not very many.

[Carniphage]

What no ssh_client on the iPhone?
(LOL)
Apple will have totally blown their chances with 0.00001% of the market.

C.

[physguy]

Originally Posted by aegisdesign

Bullcrap. The market isn't deciding a price here. There's only one seller and one price - Apple and O2. Buyers have the choice of buying it or not. They don't have a range of prices depending on their plan. They don't have a range of plans. They don't have a range of carriers. They barely have a range of retailers (O2, Apple and Carphone Warehouse).

By all measures - ie. other handsets, retailers and other plans, it's expensive. There may be people out there willing to pay that much but don't pretend market forces are deciding the price here or that it isn't expensive.



'the market' isn't the buyer. It's 'some people' where 'some people' = people who only need a subset of a modern phone's functionality, don't mind the missing bits and can afford the price and 18 month plan. Or it's people who must buy the latest fashionable gadget. Or whatever. It's not however 'the market'.

If you insist on defining terms to meet your conclusions.... well you will always be right but its really not much fun. For most people the market is any group that buys a product.

The real conclusion is one of the following,

1) The other phones are underpriced, or, wait for it..........

2) They're crap or....

3) The correct answer is - they're not serving the whole market - ta da .

Originally Posted by aegisdesign

Define 'really well' ?

200,000 doesn't seem much like 'really well' to me.

I hope it doesn't do 'really well' and it gives Apple pause for thought.

Apple defined this for you - 10 million is 2008. That's what they designed for. As long as Apple makes the revenue and margin they aimed for they met their target. 200,000 in the first weeks sounds pretty darn good to me.

Originally Posted by aegisdesign

The Nokia based Vertu phones sell well too. Are they overpriced? I'd say so. Yet people are still prepared to pay for an S40 based Nokia in a shinier case with a fashion brand attached.

Maybe someday grasshopper you'll acknowledge the concepts of value pricing and targeted marketing. Just because you think a given segment of the population are 'idiots' for paying a given price for a given product doesn't mean some provider shouldn't try to fill those 'idiot's' requirements.

Originally Posted by aegisdesign

When did I say more features were better?

I simply said the iPhone was light on features for the money. It's up to you if you think a lack of features is an advantage or not. I'm sat here with a one button mouse as I prefer it to multi button mice so I'm not adverse to simplicity in interfaces either.

Some of us however need features. I _need_ an ssh client on my phone. No ssh, no sale. I can live without pretty much any of the other restrictions. I'd prefer it on Orange too as I use Orange's two lines on one handset functionality.



Queues of brain surgeons? What do they know?

OK, stop contradicting your self. If you think that its 'light on features for the money' the direct implication is more features would be worth the money, and in any economic discussion you assume that customers pay more money for better things. Ergo, more features are better.

Now 'Some of us []need features' is most certainly true but turning that around into (parapharse) 'a lack of feature makes it a flop, or undesirable, or....' is not true.

So far the iPhone sales performance has proven these assertions wrong. The current trend in many discussion is to now raise the targets the iPhone 'should have aimed for' so that, once again it can be dubbed as missing its goals.

[Carniphage]

2) They're crap

Ever noticed how they don't let you use the phones till you actually have handed over the cash?

C.