Tuesday April 15, 05:20 PM
O2, Carphone Warehouse slash iPhone price
By Tim Bradshaw
O2 and Carphone Warehouse (LSE: CPW.L - news) have cut £100 from the cheaper model of Apple's iPhone, fuelling speculation that a 3G
version of the device will be released this summer.From Wednesday the 8 gigabyte version of Apple's mobile device will be available for £169 until 1 June 2008. The 16GB iPhone, released in February, will remain priced at £329. Customers buying either model are still required to sign up to an 18-month contract with O2, paying at least £35 per month. An Apple spokesperson described the offer as an "O2-led promotion" and said that Apple (NASDAQ: AAPL - news) would continue to sell the same model for £269 in its own retail stores. The move by O2, the UK mobile operator owned by Spain's Telefonica (Madrid: TEF.MC - news) , follows discounting by T-Mobile, owned by Deutsche Telekom (Xetra: 555750 - news) , in Germany earlier this month, with France Telecom (Paris: FR0010560771 - news) 's Orange expected to cut its iPhone prices soon to clear stocks ahead of a much-rumoured 3G device. O2 denied that the discount reflected poor sales of the 8GB iPhone, adding that the "majority of the demand" has been for the cheaper model. "Most people who wanted an iPhone have got one," said an O2 spokesperson. "We want to extend the reach of iPhone and let even more people benefit from the experience it offers and we know that price is an issue for some." But Carolina Milanesi, analyst at Gartner (NYSE: IT - news) , an IT (Frankfurt: A0MLX5 - news) research group, said that the discount may reflect a more "cautious" consumer in the mobile phone market. Ms Milanesi added that Gartner was expecting first-quarter mobile phone sales to be weaker than the same period in the past two years. In that context, the iPhone's lack of subsidy from O2 may have been a barrier to sales, with similar-capacity mobile phones, such as Nokia's N95 8GB and Sony Ericsson's W960i, available for free when bought with a new contract. O2 described the price cut as "very much business as usual". "We are constantly looking at all our products and services to ensure they remain competitive in a fast changing market. This special offer will help us to sustain momentum for the iPhone beyond what has been a very successful launch period." Apple does not reveal sales of the iPhone and said it "does not comment on future products".
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