O2 has announced that the unsubsidised iPhone 3G will be available for £350 ($630) and £400 ($720) for the 8GB and 16GB models.

Although once signed up users won’t be forced into a contract, they will be obliged to top-up an amount each month to receive a certain amount of benefits.

Paying between £10 and £14 each month will see users receiving a bonus 500 minutes of call time to any UK home phone or O2 mobile; paying between £15 and £29 adds 1,000 minutes under the same terms, while £30 or more provides unlimited calls.

Unlimited Internet access within the UK, including 3G and O2 Wi-Fi, is free for the first year of service but will cost £10 per month afterwards. Text messages aren’t included and cost 10p each.

The iPhone 3G will be available on pay-as-you-go from O2 starting September 16th.

The figure represents a 80.8% increase in subscribers for the same quarter the year before.

Additionally O2 stated that they have a “multi-year” contract with Apple to sell the iPhone exclusively in the UK after rumours pointed towards Orange picking up the exclusivity before the years end. Adding that the iPhone had not been on sale for a full year in the UK.

According to the site Orange could begin offering the iPhone 3G as soon as October.

Orange already sells the iPhone in France, Austria, Belgium, the Dominican Republic, Egypt, Jordan, Poland, Portugal, Romania, Slovakia, Switzerland and Africa.

Shurrock goes into some detail on how O2 strengthened its online systems and tested them prior to launch:

we had invested heavily to add a huge amount of additional capacity, 250 times its normal rate, and back-up systems. We tested this carefully in advance. The massive simultaneous crush, partly created by our open and honest communications approach with the registered community, exceeded even our worst case assumptions. Demand was at 13,000 orders per second. Frankly, we have to admit we just weren’t prepared for this unprecedented level of demand. No website is.

The email continues to state that the next opportunity to purchase an iPhone 3G in the UK will be Friday morning although the director states that “it is likely that stock will be in very short supply for some weeks to come.” and “The amount of devices [per store] will vary… on average a few dozen iPhones in each”.

Full email below.

Dear Mr Haskayne
Thank you for your email. Matthew has asked me as O2 Sales Director responsible for iPhone to reply on his behalf. Up front, I would like to apologise for the disappointing and frustrating experience you had yesterday on our online shop.

At O2 we had said that we would keep all those who had registered their interest in Apple iPhone 3G up to date with the launch developments. We also used the registration data to keep Apple up to date on the phenomenal interest and to support our orders for the phones with them.

We have been working continuously with them to get as much stock for the UK as possible. Unfortunately, they have only been able to supply a small proportion of the number of phones we asked for, because they are launching simultaneously in 22 countries. We are confident that over time we will start to get sufficient volume to meet demand, but it is likely that stock will be in very short supply for some weeks to come.

We opened the online shop yesterday, having only told those who had registered that it was available, to give them a chance to be one of the first to get their hands on the iPhone. This also meant that successful orders could be delivered to customers’ homes on the same day as the retail high street launch, 11th July. To put it in context we had over 200,000 people expressing interest and only a very small proportion of that number of devices available. Faced with this dilemma, we made it clear in the communications that to be fair to all customers the orders would be managed on a first come first served basis, as stock was limited. The response was so great that the online store completely sold out of iPhones within just a few hours.

We did also take steps to ensure our own customers were not disadvantaged by providing a stock allocation for them. We took as many upgrades orders from O2 customers as we did from the customers of all the other networks put together.

We run one of the busiest and most robust web stores in the UK. I appreciate that it is little comfort to you given your experience, but we had invested heavily to add a huge amount of additional capacity, 250 times its normal rate, and back-up systems. We tested this carefully in advance. The massive simultaneous crush, partly created by our open and honest communications approach with the registered community, exceeded even our worst case assumptions. Demand was at 13,000 orders per second. Frankly, we have to admit we just weren’t prepared for this unprecedented level of demand. No website is.

The next opportunity to get an iPhone will be when the device goes on sale in the high street on 11th July. O2 and Carphone Warehouse stores will be taking new orders and upgrade orders. Apple stores will only be taking new customer contracts. Most shops will open at 8.02am but some stores, particularly in shopping centres where early access is not possible, will open as usual from 9am. The approach on Friday will also be on a first come first served basis. The amount of devices will vary
depending on the store but will be on average a few dozen iPhones in each O2 or CPW store. We are expecting early queues and, like the online site, are expecting to sell out very quickly. Apple stores will have more devices. We will be receiving deliveries from Apple roughly once a week for the foreseeable future but it will be several weeks before stocks increase. We will release stock updates for the online shop as they become available.

I am sorry that you haven’t been successful in getting your hands on the new iPhone and once again I would like to apologise that the experience you had wasn’t as we wanted or you deserve. All I can do is reassure you that we will continue to work closely with Apple to get as much stock as possible for the UK. We will also continue to use the principle of first come first served as stock becomes available for both online and in our stores as we feel that is the best way to be fair and equitable to the many tens of thousands of other customers also desperate to get one.

Thank you
Stephen Shurrock
Sales Director
O2

O2 writes that demand for the revolutionary device is already at unprecedented levels, far in excess of the original iPhone.

“We’ve never seen any mobile device create the excitement and demand of the iPhone 3G,” said Ronan Dunne, CEO of O2 in the UK. “We want to ensure that everyone who wants an iPhone 3G can get one so we’ll be working with Apple to continually replenish our supplies throughout the summer.”

In response to this mornings issues, O2 confirms that the response was so great that the online store completely sold out of iPhone 3Gs within just a few hours. Though O2 had invested several million pounds to increase the order capacity of the site (with order processing capacity increased by over 250 times its normal rate), at times the site still couldn’t process the sheer weight of demand.

Full press release below.

07/07/2008 08:49
O2 Sees Unprecedented Demand for iPhone 3G
iPhone 3G goes on sale in stores at 8.02am on 11 July

O2 today announced that Apple’s highly anticipated iPhone 3G will go on general sale from 8.02am on Friday 11 July in O2, Apple and Carphone Warehouse retail stores*. To ensure fairness, O2 will sell the device on a strictly first come, first served basis to both new and upgrading customers in all retail outlets.

Demand for the revolutionary device is already at unprecedented levels, far in excess of the original iPhone. “We’ve never seen any mobile device create the excitement and demand of the iPhone 3G,” said Ronan Dunne, CEO of O2 in the UK. “We want to ensure that everyone who wants an iPhone 3G can get one so we’ll be working with Apple to continually replenish our supplies throughout the summer.”

This morning customers who had pre-registered their interest in iPhone 3G were given the opportunity to purchase via O2’s online shop (http://shop.o2.co.uk) a limited stock of devices which had been set aside. The response was so great that the online store completely sold out of iPhone 3Gs within just a few hours. Though O2 had invested several million pounds to increase the order capacity of the site (with order processing capacity increased by over 250 times its normal rate), at times the site still couldn’t process the sheer weight of demand.

Details of when new supplies of iPhone 3Gs will be available via the O2 online shop will be updated regularly via the website.

Business customers can from today also start placing orders for iPhone 3G through O2 business channels. Delivery timings will be communicated when an order is placed.

iPhone 3G combines all the revolutionary features of iPhone with 3G networking that is significantly faster than the first generation iPhone. The device has built-in GPS for expanded location based mobile services, iPhone 2.0 software (which includes support for Microsoft Exchange ActiveSync) and runs the hundreds of third party applications already built with the recently released iPhone SDK. These can be accessed via iTunes.

The 8GB iPhone 3G will be available for free to customers opting for the £45 or £75 tariffs and £99 on the £30 and £35 per month tariffs. The 16GB model will cost £159 on the £30 and £35 tariffs, £59 on the £45 tariff and it will be free on the £75 tariff. All customers will continue to receive unlimited UK data browsing over O2’s mobile network and unlimited access to over 9,000 Wi-Fi hotspots through both The Cloud and BT Openzone***.

Existing iPhone customers can upgrade early to the iPhone 3G through O2 channels by re-signing a new 18 month contract, taking advantage of the same great offer as new customers. They will then be able to give their existing 2G iPhone to a friend, family member or colleague who can transfer onto an iPhone tariff if they are an existing O2 Pay Monthly or business customer, stick in their existing O2 SIM and buy the appropriate Bolt Ons for unlimited data, or buy an iPhone Pay & Go SIM card from 11 July offering unlimited data and unlimited Wi-Fi access to The Cloud and BT Openzone hotspots for £10 per month. Full information is available on o2.co.uk/iPhone.

The iPhone 3G will launch on O2 Pay and Go (Prepay) in time for the Christmas shopping period, with pricing details to be confirmed closer to launch.

-ends-
Note to editors:

*The iPhone 3G will go on sale at 8.02am in all Apple stores and at selected O2 and Carphone Warehouse stores on the high street. All remaining stores will open at standard trading times. Check with your local store or online for opening times.
**Based on 3G and EDGE testing. Actual speeds vary by site conditions.
*** Subject to O2’s excessive use policy

“If you want to place your order, all you need do is click on the link below on your Mac or PC, select the tariff, select the iPhone 3G model and sign a new 18-month contract online,” stated O2 in its email to users.

The pre-order service was immediately struck with issues and was taken offline, the service was later resumed but again began to crumble and now users visiting the O2 website are greeted with a message stating that “due to huge demand for the iPhone 3G, we’re currently out of stock.” O2 advises those wishing to pre-order to come back on July 10.

Vodafone email informing customers of midnight iPhone launch

On the other side of the world, O2 has begun accepting pre-orders in the UK. iPhone 3G’s ordered online will be delivered on July 11 and will be able to be activated via iTunes at home.

Despite accidentally revealing the price of pay-as-you-go iPhone’s last week O2 has now confirmed that the units won’t be available until “later this year”.

The publication claims that a local Carphone Warehouse disclosed the information which stated times and details of the iPhone 3G launch on July 11, these included VIP passes for those who pre-order the iPhone.

Contrary to previous reports the publication notes that O2 and Carphone Warehouse stores will open at 7.02am and as of Monday July 7 customers will be able to pre-order the iPhone online; although O2 has confirmed that iPhones will be available on a first-come first-served basis.

According to the report customers who pre-order will receive a “Welcome Pack” and “VIP ticket.”

The information emerged yesterday when O2 contacted customers warning of potential stock shortages.

“Orders will be placed on a first come first served basis,” O2 warned, “we will be writing to you again before the 11th with details about how you can place your order.”

AppleInsider is also reporting that O2’s policy of offering an unlock code for Pay As You Go phones after 12 months will remain in place for the iPhone 3G.

The unlocking which costs £15 would allow the iPhone 3G to be used on any other network.

The 8GB iPhone 3G will cost £299.99 and the 16GB will come in at £359.99.

Both iPhone models include 6 months of unlimited browsing and Wi-Fi, benefits that will cost pay-as-you-go customers £10 per month afterwards.

[Update] O2 has pulled the page containing the prices as of 23.00 BST on Wednesday June 25.

Unlike like the launch of the original iPhone, customers can no longer buy a handset and activate it onto a contract from home, purchasers must sign up to a contract in-store and the credit check process can be lengthy.

According to Mac Rumors an O2 rep has informed several customers that users will be able to signup for iPhone 3G contracts ahead of the handsets launch:

The main point he told me was this, From July 1st All O2 stores in the UK will offer pre registration Credit checks, You can come in store, have your contract setup for you, and a unique registration code given to you. The contract will simply be “paused” and wont be activated. No details are taken about which model phone you are going to be purchasing.

You can then turn up on July 11th and quote the registration code and then make a standard purchase of the phone and then the contract will become activated.

In other news Stuff Magazine claims that sources have disclosed the price points for the pay-as-you-go iPhones from O2. Stuff claims that the 8GB iPhone will cost £370 and the 16GB £470.

According to a report Apple and O2 are working out a method in which Apple can sell iPhones through its online and high street retail stores at the O2-subsidised selling price.

The problem occurs because iPhone 3G purchasers will have to activate their new iPhones in-store, and Apple lacks systems to carry out credit checks in its stores.

“We are currently working closely with Apple to enable them to issue contracts in store. Full details are still to be confirmed,” an O2 spokesperson explained.

The O2 spokeswoman also confirmed that pay-as-you-go (prepay) iPhones, which are expected to be sold at the full price, will be sold in Apple stores, as well as O2 and Carphone Warehouse.

The sale price of prepay iPhones is rumoured to be in the region of £350 (8GB) and £450 (16GB).

According to the UK carrier almost four times as many people have registered interest in the iPhone 3G than those who registered an interest in the original model.

O2 claims that 130,000 people have registered their interest since last week when the iPhone 3G saw an announcement at WWDC.

O2 today introduced a new £30/month iPhone tariff featuring 75 minutes and 125 texts on top of the normal unlimited data and visual voicemail.

O2 offers the following four tariffs for iPhone 3G:

• £30/month - 8GB iPhone £99 - 16GB iPhone £159 - 75 Minutes - 125 Texts - Unlimited Data & WiFi - 18 month contract
• £35/month - 8GB iPhone £99 - 16GB iPhone £159 - 600 Minutes - 500 Texts - Unlimited Data & WiFi - 18 month contract
• £45/month - 8GB iPhone Free - 16GB iPhone £59 - 1200 Minutes - 500 Texts - Unlimited Data & WiFi - 18 month contract
• £75/month - 8GB iPhone Free - 16GB iPhone Free - 3000 Minutes - 500 Texts - Unlimited Data & WiFi - 18 month contract

O2 is also offering existing iPhone customers the chance to simply renew their contract rather than having to pay it off.

To thank you for being an iPhone fan, we’re offering you an early upgrade to the brand new version when it launches on 11th July 2008. You won’t have to wait until the end of your existing contract either, all you’ll need to do is agree to a new 18-month minimum term contract.

The article also concurs with a rumour last week that the iPhone will cost £100 and be sold with an 18-month contract. But it appears O2 is also planning to offer free upgrades to some users and free iPhones to those on the top iPhone tariff which is currently £75 per month.

It is also expected that owners of the current iPhone will be able to upgrade their handsets without charge although they will be “obliged” to sign-up for another 18-month contract.

The 3G iPhone is widely expected to see a debut this coming Monday at WWDC but not ship until later in the month.

Apple is widely expected to allow mobile carriers to subsidise the new iPhone which is rumoured to see an introduction at WWDC which kicks off on June 9th.

A source close to the deal stated to Times Online that the new iPhone will be on store shelves by July.

When asked about the whereabouts of the 3G phone he said: “That’s more of a question for Apple … but over the coming weeks we will do a joint announcement with Apple as Telefónica Group”.

The 3G iPhone is widely expected to be released at the WWDC keynote on June 9th.

It should be noted that during the last financial results announcement Apple did state that shortages may happen in the near future but blamed increased demand rather than depleting stock.

Most of this week O2 in the UK has had intermittent availability of the 16GB iPhone.

iPhone Shown as out of stock at O2 and Carphone Warehouse

Both O2 and Carphone Warehouse are showing no stock of either model of iPhone this morning.

The news comes less than a month after O2 discontinued the 8GB model of the iPhone opting to only sell the 16GB.

The Apple UK online store continues to sell both the 8GB and 16GB iPhone with shipping times quoted as 24 hours.

[Update] The 16GB iPhone is now back in stock on the O2 online store and O2 has reported that retail stores have reasonable stock.

Thanks to the most phenomenal response to the promotion, The Carphone Warehouse is now out of stock on the Apple iPhone.

We apologise for the short notice but would like to thank everyone who participated in the campaign. Carphone do not expect to receive any additional stock at this time.

The strange occurrence comes just two weeks after O2 and Carphone Warehouse slashed the price of the iPhone to £169 causing a reported spike in sales.

According to the site O2 will discount the 8GB iPhone by £100, from £269 to £169. The offer will reportedly run from April 16th to June 1st.

The 16GB iPhone will remain at £329.

O2, the UK division of Spanish firm Telefonica reported that sales were up 9.5% in the last quarter of 2007.

Although the company didn’t disclose exact iPhone sales figures it did note that the device “helped” bring in 484,000 customers and 276,000 contracts.

According to O2 the iPhone has the highest satisfaction rating and lowest return rate out of any of its phones and iPhone users generated around 30% more revenue per use than the average O2 customer.

O2 also announced today that it will be the official carrier in Ireland and the device will go on sale on March 14.

The iPhone will go on sale in Ireland on March 14 and will be available through O2 retail stores, and Carphone Warehouse stores.

iPhone will be available in an 8GB model for €399 (inc VAT) and a 16GB model for €499 (inc VAT).

Danuta Gray, O2 Ireland CEO, said, “The iPhone is changing the way people use their mobiles forever, and we’re thrilled to offer it to O2 customers in Ireland. Our strategy in Ireland continues to be to bring our customers the very best innovations and experiences in mobile communications.”

The following tariffs are avilabke for the iPhone:

• €45/mo: 175 minutes, 100 texts, 1GB data
• €65/mo: 350 minutes, 150 texts, 1GB data
• €100/mo: 700 minutes, 250 texts, 1GB data

The move is part of an overall improvement in the network’s offering for all its mobile phone customers. The company is introducing six new and simpler tariffs and introducing free voicemail for its new and existing customers from 1 February.

iPhone users currently paying £35 a month will enjoy up to 600 minutes and 500 text messages (was 200 minutes, 200 texts).

Those on £45 a month will receive 1200 minutes and 500 texts, and finally those currently paying £55/month will be moved to the lower £45 or offered a chance to join a £75/month tariff receiving 3,000 minutes of calling and 500 texts.

“Mr Key says 200,000 iPhones should have be sold in Britain by early January - in line with his expectations since its November 9 launch, although some analysts claim his target is conservative. Gartner, the research firm, says sales of up to 400,000 should be possible,” Parker reports.

The FT.com reporter wrote that “A 3G version of the iPhone will be launched by Apple next year; Mr Key is confident that O 2 will also have an exclusive deal for the mark two device.”

“O2 has signed a multi-year deal with Apple for the iPhone, and Mr Key insists Vodafone, for example, could not muscle in and take the 3G iPhone in the UK.”

“About 60 per cent of iPhone customers are sending or receiving more than 25 megabytes of data per month, which is the equivalent of sending 7,500 e-mails. By comparison, only 1.8 per cent of O2 ’s other mobile customers on monthly contracts are consuming more than 25MB per month,” Parker reports. “The O2 research suggests that, after years of dashed hopes for the operators, customers are on the verge of surfing the web on their mobiles in significant numbers.”

“The phone had sold ‘in the tens of thousands’ since its launch on Friday,” he said in an interview with the paper.

When speaking to Thomson Financial Erskine declined to reveal how many iPhones it has sold, as the exclusive mobile network for the handset.

“He said early sales had been in line with its original expectations and customers had found the new handsets easy to use,” Thomson Financial reports.

iPhone will go on sale this Friday, November 9 at 6:02 p.m. at Apple, O2 and Carphone Warehouse retail and online stores. iPhones will be available at more than 1,300 Apple, O2 and Carphone Warehouse retail locations across the UK.

“We can’t wait for our customers to get their hands on the iPhone this Friday night,” said Ron Johnson, Apple’s senior vice president of Retail. “Every Apple retail store will offer support for iPhone at the legendary Genius Bar, and beginning Saturday morning you can learn how to get the most out of your new iPhone by attending a free workshop or scheduling a personal training session through our popular One-to-One program.”

“O2 stores are fully geared up for what will be the year’s biggest product launch,” said Mark Stansfeld, O2’s sales director. “We’ve hired and trained hundreds of new iPhone specialists who will be in all 450 O2 stores giving live demos and showing customers how to get the most out of their iPhone.”

iPhone users in the UK will be able to activate their new iPhones using Apple’s popular iTunes® software running on a PC or Mac® in the comfort and privacy of their own home or office, without having to wait in a store while their phone is activated. Activating iPhone takes only minutes as iTunes guides the user through simple steps to choose their tariff and activate their iPhone.

The iPhone which goes on sale on Friday November 9th in the UK was said to have “unlimited” data access when it was unleashed on September 18th. But further investigation revealed that the plan had a 200MB per month limit.

The mobile company says that average data usage on mobiles is just five megabits a month, its feedback showed that potential iPhone customers felt uncomfortable with having any limit.

‘Customers find ‘unlimited with limits’ confusing, plus most people don’t speak in megabits or understand what they equate to,” said O2 UK chief executive Matthew Key.

”So we’ve taken the decision to remove the fair usage cap so that ‘unlimited’ really does mean ‘unlimited’ – this is a market first.”

Matthew Key has also taken time to talk to the Telegraph about how O2 secured the deal with Apple to exclusively sell the iPhone in the UK.

When O2 revealed its iPhone contracts last month it promised “unlimited” across all the tariffs. O2 also mentioned the availability of unlimited data add-on plans for other phone contracts.

On the O2 website “unlimited” data is simply accompanied by a star but with no explanation other than a “fair usage policy” applies.

At the Regent Store in London on September 18th, O2 CEO Matthew Key noted that the limit was 1,400 pages a day. But it appears that the fair usage policy only allows 200MB of data transfer per month. It seems that O2 believes that 200MB of data a month is more than sufficient, although this is only 1/5 of what T-Mobile offer.

On top of this, it has also been revealed that iPhone users will be limited to just 60-hours per month of Cloud WiFi network usage.

Unlocked French iPhone

It is looking increasingly likely that Apple and Orange will be forced to sell an unlocked iPhone on France due to a French law.

According to the International Herald Tribune, French law forbids the exclusive sale of a mobile that is locked to a particular carrier, so the iPhone will be forced to be sold unlocked.

Pricing for the unlocked device has yet to be revealed but is expected to go on sale on November 29th when the iPhone ships in France.

O2 UK CEO Matthew Key spoke to journalists on Tuesday and noted that the marketing effort would be the company’s “most significant campaign” in the run-up to the key Christmas trading period.

Key also said that he believed 80 percent of O2 UK’s high-value customers wanted an iPhone while 40 percent of high spenders on other networks were considering the switch.