First it was iPhone for 02, now Palm Pre
Updated on 07 July 2009
Having acquired the UK rights to the iPhone, 02 tightens its grip on the smartphone market as it becomes exclusive operator for the Palm Pre. Benjamin Cohen reports.
O2 has become the exclusive mobile operator for the much hyped and eagerly awaited smart phone the Palm Pre. Like the Apple iPhone, the handset will only work in the UK if users are customers of O2.
The Palm Pre has been seen in the USA as the only true rival to the Apple iPhone. It’s smaller and, like the iPhone, has an intuitive touch screen. But unlike the iPhone it also boasts a flip out QWERTY keyboard. Whenever I’ve used an iPhone I’ve found it pretty difficult to type long emails on.
The phone itself won’t appear in the UK until Christmas so I haven’t used, it but in the USA most technology critics were pretty keen on it.
What’s interesting, though, is that it is O2 that have successfully run the rights to sell the phone in the UK. They have secured hundreds of thousands of new customers through the iPhone, primarily on pricy long term calling plans.
But this has come at a significant sacrifice to O2 because they have had to share revenue from calls with Apple, something not seen before in the industry. O2 claims that the revenue share has still resulted in increased profits.
There have been rumours in the past that O2 may have to share the rights to the iPhone with rival networks, though nothing concrete has ever emerged. Yesterday in the USA Apple’s exclusive iPhone deal with AT&T was criticised by the chairman of the Senate anti-trust committee, and there were also reports that the Department of Justice was to being an investigation
It’s not yet known what sort of deal Palm has struck over the Pre and whether O2 will share revenue with Palm. But the exclusive deal is far wider than just the UK market, O2’s parent company Telfonica has also signed deals with its Spanish, German and Irish subsidiaries.
What is clear: if you want a top smart phone in Britain, you’ll need to be with O2. Michael Brook of T3 magazine explains: “O2’s dominance in the smart phone market looks to be turning into a monopoly, with two of the most innovative, market-leading handsets offered exclusively on their network.
“Obviously, this is great for O2, but for tech lovers faced with contract restrictions or poor O2 coverage the news will be frustrating. Other network providers should sit up and take note – this really is a signal for them to up their game before O2 takes a devastating lead.”
