Apple has confirmed O2 as the exclusive UK carrier for the iPhone, which will make its UK debut on 9 November.
Sale of the handset will be restricted to Apple's retail and online outlets, O2 stores and The Carphone Warehouse in the UK. The 8GB device will retail for £269 (AU$637), with three tariffs from £35 (AU$83) to £55 (AU$130) per month all on an 18-month contract, including 'unlimited' mobile data.
Speaking at the unveiling of the deal at Apple's Regent Street store (pictured below), Apple CEO Steve Jobs said customer satisfaction is higher on the iPhone than any other product in Apple's history. He added that after talking to all the mobile networks in the UK, Apple chose the one that "felt like home".
O2 is investing in its network to support the Wi-Fi capabilities of the iPhone and says it will have 30 percent EDGE coverage by the launch of the phone.
The operator's UK CEO Matthew Key said: "We are confident that we will sell a significant number of iPhones." But neither Apple nor O2 would give details of the financial arrangement behind the deal. Key said O2's own research suggested 80 percent of their high value customers would like the phone, and 40 percent of customers on rival networks would switch to get their hands on the device.
Steve Jobs unveils the iPhone at Apple's flagship UK store in London
Apple has already sold one million of the phones in the US.
There had been long-running speculation about which operators would offer the iPhone in markets outside the US, and Jobs responded to a question about how the other UK networks felt about the negotiations by saying: "We dated a few people that we didn't marry and then we found someone we wanted to marry and we did. So there's a few upset girlfriends out there. It wasn't an economic choice it was a cultural choice."
Jobs also said that 3G chipsets are still too power hungry to be used in the iPhone: "Right now you make a really big trade off going to 3G -- and that's really bad battery life."
Instead, he pointed to the Wi-Fi capabilities of the device: "The one thing you do that you would like to go faster is the Internet so what we did was rather than cut the battery life we built in Wi-Fi which is way faster than a 3G network."
He also refused to rule out future price cuts for the gadget -- such as the ones which upset early iPhone adopters in the US -- saying there are "never any guarantees" in technology.
