Apple has announced its iPhone will be launched in the UK in November, available exclusively on O2.

The iPhone looks likely to be the next step in the convergence of mobile telephone, portable media playback and mobile internet technologies. As with most Apple products, the device is attractively designed, while also having market leading functionality and usability.

It is reported that each of the leading UK network suppliers were keen to discuss a deal with Apple in regard to the iPhone. For O2, agreeing an exclusive deal with Apple means it stands to gain from sales revenues from both the iPhone and the compulsory 18-month contract, although to what extent is unknown, as the financial arrangements between Apple and O2 were not announced.

There are also other, perhaps less tangible, benefits that are likely to feed through. For one, the interest surrounding the iPhone launch will undoubtedly drive increased footfall into O2 stores, and we can expect stores to be emblazoned with Apple and iPhone POS in order to capitalize on this. Some of this footfall will be converted into iPhone sales while some will be diverted into other revenue streams.

The link-up with Apple will also help increase O2’s brand strength and profile a key part of the mobile phone operator’s strategy in the light of recent sponsorship of the Millennium Dome and continued sponsorship of England rugby union. Similarly Carphone Warehouse which will also sell the phone will benefit in similar ways.

The launch will also stimulate the market as rivals continue to invest in product development in order to close the gap between themselves and Apple. Indeed, Sony Ericsson has been pushing its Walkman phones in recent months while Nokia and Vodafone have recently invested heavily in music related products and services. It is from these developments that other retailers and networks providers will benefit, although so will O2 and Carphone Warehouse.

With the iPhone already having sold over a million units in the US since June, it is likely that in the UK it will also prove popular. The launch will also stimulate interest in this new technology, which will benefit the mobile phone market as a whole, and not just the few chosen to partner Apple.

Source: Verdict Research