"Apple has succeeded in committing European mobile phone operators that want exclusively to sell its new iPhone to share parts of their revenues with the technology group.
The contract, which was signed by three European mobile operators in recent days, requires that the operators hand over to Apple 10 per cent of the revenues made from calls and data transfers by customers over iPhones.
The contract was signed by T-Mobile of Germany, Orange of France and O2 in the UK, people familiar with the situation told FT Deutschland, the Financial Times’s sister paper.
The operators are set officially to announce the partnerships at the IFA trade fair in Berlin at the end of August."
It will be interesting to see how the operators plan to make that 10% back. My horrible, horrible suspicion is that the plans they offer the iPhone with will be relatively uncompetitive, and that they’ll rely on the shine of the phone in order to gain customers.
But you get an idea of how desperate the phone companies were later in the piece:
Hamid Akhavan, chairman of Deutsche Telekom’s mobile business, is
said to have campaigned for personal talks with Steve Jobs, Apple’s
chief executive, about the contract, while Peter Erskine, chief
exeutive of O2, is said to have tried the same.
“These are not negotiations among equals. Apple clearly had the upper hand,” one industry expert told FT Deutschland.
For companies that are used to getting what they want from phone makers, that’s got to hurt. But the flip side is that the companies are, at least, likely to make some margin from the phone itself:
Apple has also lured the mobile operators with the prospect of a
financially risk-free business, as it will not allow the now common
subsidies on the sale of handsets.
So we can expect to pay the full whack for an iPhone, which would probably be around £350 for the cheaper iPhone and £399 for the more expensive model, including VAT.