iPhone to cost callers £720

Apple's long-awaited iPhone launches in the UK today - but it won't come cheap.

The company has signed an exclusive supply contract with the Spanish-owned O2 network guaranteeing it up to 40% of the revenue earned from customers.

Although the price of the phone in the UK has been kept a closely-guarded secret, it is expected to retail for around £199.

But the bills do not stop there, for it is believed that buyers will have to sign up to an expensive long-term contract with O2.

This is likely to commit them to paying as much as £720 over two years for their iPhone services. It is understood that the new phone, which has won rave reviews in the U.S., will be sold exclusively through Carphone Warehouse.

The iPhone has been billed as a breakthrough technology, even the 'God machine', because of its beauty on the eye, many functions and unique touch-screen controls.

However, it is being launched into a crowded market of mobile phones which double as music player, internet browser, e-mail device, personal organiser and camera.

The major difference between the iPhone and its rivals is the fact that it has a touch-screen QWERTY keyboard which can be used, for example, to write e-mails.

It is thinner and sleeker than rivals such as the Blackberry and Treo, which tend to have real keyboards with miniature keys.

The 8 gigabyte version of the iPhone holds up to 1,825 songs. The beauty of the iPhone is the software, which means the phone is simple to operate and responds to a flick of a finger.

There is a 3.5-inch screen with a range of icons which can be accessed simply by touching them.

The fact that Apple has been able to negotiate a share of customer call revenue is unprecedented in the UK mobile phone market.

The exclusive deal with O2 should mean that the device will not work with any other network, limiting the ability of consumers to shop around for the cheapest call package.

A thriving internet community of techno-experts and consumer activists are offering advice on how to unlock the phones and use them with a rival network.

But while this will seem attractive to some consumers, it is believed that Apple will refuse to honour any warranties if the iPhone should break.

When the phones went on sale in the U.S., consumers celebrated after queueing for days to be among the first to own one.

However, this pleasure was soured when the price of the 8GB phone was slashed from $599 dollars to $399 (£197), only ten weeks after it was launched.

Analysts suggest that the decision was made to give a shot in the arm to sales and deliver on a promise of improved turnover and profits.

The company subsequently apologised to those customers who had paid the full price and offered a $100 voucher against Apple products.

British consumers might well be suspicious that Apple will make the same move again, charging a high initial price only to cut the price later.

However, it would be a high-risk strategy to repeat an action which angered so many loyal fans in the U.S.

Source:http://www.thisismoney.co.uk/bbphone/article.html?in_article_id=424441&in_page_id=182