Filed under: Analysis / Opinion, Apple
After the storm: iPhone & the U.K.
Pricing
Until today, we couldn't compare the iPhone contact with other existing O2 offering, but pricing for the 'unlimited' data packages was released this morning (which, if you're an existing customer, will be available on October 1st). Looking through the package for a single mobile device (other than the iPhone) on 'unlimited' data, O2 is charging £7.50 ($15US) per month, with a fair use policy coming into play above a stingy 200MB (1,400 pages) per month. Contrast that with the iPhone deal, which according to O2 CEO Matthew Key would require you to use 1,400 pages per day to incur the wrath of the fair use policy - if the figures are correct, that's about 200MB a day.
To compare the costs of an iPhone and a competitor, I went to the O2 online store. The common nemisis to iPhone is the Nokia N95, so I chose that with the most similar package to the iPhone package (200 minutes) available - the Online 25 package - and then stacked that up with Cloud WiFi and the new data package (remembering that the N95 is on a far less generous 'unlimited' data package).
Comparing prices is, as ever, highly contentious - offers can obviously affect these prices - but to say that the iPhone is more expensive is a myth.
Where's the 3G?
For once, I believe Steve Jobs when he talks about just how hungry 3G mobile phones are when it comes to power - it's not just the Reality Distortion Field some readers may think I'm living in - I've experienced the horrific battery drain of a third generation mobile. Sure, it's highly desirable to get the higher data speeds, what with the UK phone networks having spent £21 billion (US$42 billion) on 3G licenses, but at the expense of battery life, I'm quite happy to wait a little longer for my downloads, and keep going for longer - especially given the inclusion of WiFi as part of the contract.
In Conclusion
Whilst readers will undoubtedly point to deals for other handsets that they believe offer better value, I can't help but feel those who've been particularly vocal over the cost of the iPhone are purely playing out some unfounded anti-Apple hysteria (affectionately known as FUD). The handset may be more expensive to buy outright than its American relative, but when considered in the context of the UK mobile market, the supposed facts supporting the Apple hatred start to falter.
Where's the 3G?
For once, I believe Steve Jobs when he talks about just how hungry 3G mobile phones are when it comes to power - it's not just the Reality Distortion Field some readers may think I'm living in - I've experienced the horrific battery drain of a third generation mobile. Sure, it's highly desirable to get the higher data speeds, what with the UK phone networks having spent £21 billion (US$42 billion) on 3G licenses, but at the expense of battery life, I'm quite happy to wait a little longer for my downloads, and keep going for longer - especially given the inclusion of WiFi as part of the contract.
In Conclusion
Whilst readers will undoubtedly point to deals for other handsets that they believe offer better value, I can't help but feel those who've been particularly vocal over the cost of the iPhone are purely playing out some unfounded anti-Apple hysteria (affectionately known as FUD). The handset may be more expensive to buy outright than its American relative, but when considered in the context of the UK mobile market, the supposed facts supporting the Apple hatred start to falter.
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Reader Comments (Page 1 of 3)
Carbon Footprint said 12:10PM on 9-27-2007
Mountains and mountains of FUD, indeed. The iPhone is the better product at the better cost (both short- and long-term). My cousin in Manchester just got hers and she's thrilled.
http://www.filterra.com/low-impact-development
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Fraser Drew said 12:24PM on 9-27-2007
It is at the exact price points I'd expected prior to release. However, there is one reason I'm not buying it. The poor EDGE coverage. The UK edge coverage is terrible, so you'll be on GPRS MOST of the time; which is a shame, and is making me hold off; however, Nik, I agree that Apple would have to make other compromises to make it 3G; which would ruin the phone. It's just a case of waiting on the industry to make some less hungry 3G chips!!!
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Marky said 12:26PM on 9-27-2007
I pay £5 a month to '3' for free unlimited Internet access via a 3G network, 500 minutes a month/100 texts, Push Email, do not pay to collect my voice mail and get a fax number thrown in as well. I have also never paid for my handsets. Why should I switch networks and pay for an iPhone with less ability and more expensive monthly subscription which I bet is an 18 month and not a 12 month contract?
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shaun said 12:28PM on 9-27-2007
I live in Manchester! where does your cousin live? lol JK.
I got an iPod Touch the day after the iPhone press conference because I have just started at uni and I don't want an expensive contract.
Very happy with my purchase! Definitely getting an iPhone one day, but not in the foreseeable future
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Nik Fletcher said 12:31PM on 9-27-2007
Fraser,
You're absolutely right - the 3G chipsets at the moment are the mobile-phone's equivalent of the Hummer when it comes to power consumption, sadly.
Marky,
But arguably you don't benefit from the user experience the iPhone offers. It's all swings and roundabouts :)
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david said 1:57PM on 9-27-2007
I realise that you gave a caveat on comparing prices but you are so out of wack on the N95 it must be pointed out. As most people know in the UK you can get pretty much every handset for free or next to nothing. Anybody paying anywhere near £199.99 for an N95 really doesnt know the market.
That said I will be waiting in line for an iphone as despite being disapointed both by the lack of 3G and the actual carrier choice its still a fantastic phone which look gorgeous.
I also wish that it was at least a 16gb as this is causing me turmoil during the wait as the ipod touch is calling my name.
Heres hoping a memory boost is the "one last thing" before launch.
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Corpset said 1:43PM on 9-27-2007
Usually you get the phone for free when you sign upp for a contract. You don't get the iPhone for free, so the N95 would be cheaper. Here in Sweden, you almost never pay for a new mobie phone unless you want to use prepaid cards. The N95s cost here is 0. 0 in every currency there is.
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mungler said 12:35PM on 9-27-2007
To #1, 'Carbon Footprint' - how, exactly, did your cousin manage to get an iPhone in Manchester given that it wont be released until Nov. 9th?
I dont buy the 3G line. My wife has a 3G Sony Ericsson and its battery life is better than my 2G SE (albeit slightly older).
30% EDGE is a crock of poop.
200Mb/month is another crock of poop for those of us on o2 who wont be buying an iPhone.
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Nik Fletcher said 12:35PM on 9-27-2007
Guys, you're creeping me out - I'm currently living in Manchester!
David,
You are correct - the pricing of phones is a contentious one. In the interests of a fair test, I simply went to the O2 store and, like for like, specced the contract and the handset to that of the iPhone.
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mungler said 12:37PM on 9-27-2007
Also, #3 Marky - hows the battery life on your 3G phone?
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NutMac said 12:44PM on 9-27-2007
Since N95 is a 3G phone, does one really need WiFi with it? Let's face it. I own and love the iPhone but N95 is cheaper in the UK by a long shot.
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jonas said 12:58PM on 9-27-2007
the battery argument is bull. there are good enough batteries, but they cost more and steve doesn't want to pay :)
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Simon Clayson said 1:04PM on 9-27-2007
David is right. £199 for the N95? Won't haggle? Now imagine haggling for an iPhone this side of Christmas. Pleasure doing business with you. Tell you what, I'll throw you in this Gaud...
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James said 1:06PM on 9-27-2007
I've got to say that's some genius doublethink on the EDGE there - to paraphrase, "The slow data on EDGE doesn't matter because the EDGE network has such poor coverage, therefore it's better than 3G."
RDF indeed.
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tim said 1:08PM on 9-27-2007
tuaw.co.uk anybody? ;-)
ive been using my iphone for a week now in seattle, using the internet a lot and i can tell you ive only barely hit 10mb download. so 200mb might not be that bad. you have to remember, you arent downloading flash, a lot of sites cater to the iphone, etc.
as for the 3G...that had been keeping me from being an early adopter, but then i realized my current sony ericsson 3G phone CRAWLED online, even in its little google maps app, and i had seen the EDGE on the iphone in action, it actually felt faster to me.
honestly, my wifi feels like it goes the same speed as EDGE, both somewhat slow, what i would expect from a tiny device.
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shak said 1:23PM on 9-27-2007
what a load of rubbish, Nick, do you even know what you are talking about here? do you even live in UK? have you ever bought a Nokia N95 from a UK shop?
Enough of this "I'll twist the facts to make you want this very very expensive and not so worth it iPhone cuz I am an Apple fanboy"
you can get a Nokia N95 with more features without that £260+ handset price (N95 comes free) and at £15/month ... yes you did well in the last paragraph, but not good enough.
iPhone is an expensive device and certainly at the very high end of UK market in terms of price .. there are not many (infact none that I know of) that cost £269 for handset and come at £35/mo for 12/+ month contract.
get real, you are supposed to be a credible blog at least do your homework before you set out for this sort of marketing.
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K said 1:31PM on 9-27-2007
Hmm, N95 costs £199.99 for a £25/month contract or it's free for £30/month. Which contract would you go for? To use the American vernacular, you do the math.
I love Apple and the 'total cost of ownership' is a good way to compare the N95 versus the iPhone, you've overstated the N95's cost by £110. Either that, or you've assumed people are too stupid to realise they'd save money by paying an extra £5 per month.
In any case, for me, the issue isn't a straight choice between N95 and iPhone. I already have an N95. The question is, is it worth me changing mobile phone providers when my contract is up for renewal next month? The answer for me is no - based on cost, based on mobile network coverage.
No doubt it'll be a fairer contest when it comes to the next renewal cycle in 18 month but this time round it's just not worth it.
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Chris E boy said 1:34PM on 9-27-2007
I'd love an iPhone... but why oh why did they not put a flash on the damn camera? Not bothered about 3G but most of my photos on my phone are taken in nightclubs and bars which makes this phone useless to me...
Waiting for the 2nd Gen.
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Nik Fletcher said 1:38PM on 9-27-2007
shak,
You might like to read my introductory post on TUAW to discover where I'm located (http://www.tuaw.com/2007/08/23/well-hello-there/). I'm fully aware that the mobile phone market is continually bringing out new deals, and whilst perhaps others can find better offers, as far as possible I stuck to the basic principles of a fair test: I used the same site, and as far as possible the same tariffs. Looking down other mobile phone sites, there are other deals available - and my caveat wasn't simply a cursory disclaimer: the huge array of offers and deals that retailers make in trying to sell mobile phones make it difficult at best to compare prices. All pricings on things like mobile phones should be labelled as 'subjective' by law, in my opinion - there's so many different ways to compare them.
I would agree, however, that the iPhone is an expensive proposition, given the smaller market that smartphones have, and the understandable reluctance of folks to spend a significant amount of money on a handset that is a) seen as disposable and b) rivalled by dozens and dozens of free handsets that cover most peoples needs.
Best Regards,
Nik
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Nik Fletcher said 1:44PM on 9-27-2007
K,
I priced the N95 not by comparing the handset prices first, but by contract pricing first - if people are more concerned about monthly costs (as I generally am) then they will price by that way, and never see the price difference between contracts. £110 is a sizeable difference, but it's not the cost of 1 iPhone in savings. When the pricing came out, the unilateral reaction was 'but every handset is free' - a reaction that is *almost* entirely true. But it's not the whole story, as people didn't factor in Lifetime Ownership costs.
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