Rory Cellan-Jones

Apple - angering the fans?

  • Rory Cellan-Jones
  • 9 Jun 09, 10:40 GMT

As ever, there was huge excitement amongst Apple's loyal fanbase (does any other commercial business have fans not consumers?) as news emerged last night of a new iPhone.

iphone 3GSBut, in the UK at least, the excitement has swiftly turned to anger over the sheer, eye-watering expense of owning the iPhone 3GS. So are O2 and Apple in danger of alienating existing iPhone users while doing nothing to attract new customers?

Contrary to expectations, O2 has retained its exclusivity over the iPhone but it looks as though that was at a price, and one that is now being passed on to consumers.

If you sign up to an 18-month contract for the new phone, at £34.26 a month, you'll still pay £184.98 for the 16gb version or £274.23 for the 32gb handset. Is there another phone that will cost you that much when you sign up to a chunky contract?

It's the early adopters, those who bought the original iPhone and then upgraded to the 3G version, who are really spitting tacks. They somehow thought they were special, and, just as last time, would be offered a deal to make upgrading to the 3GS affordable. But no. The only way they can upgrade is to buy out the remainder of their contracts and start again - which would be massively expensive.

O2 indicated to me that it was slightly unrealistic to expect the firm just to write off the big subsidy they'd already enjoyed on the 3G version - but some dedicated fans are already starting online petitions to complain about the cost of an upgrade.

But if the loyalty of the fanbase is being tested surely there's something to woo new users to the iPhone? Not in the UK. While there is a price cut in the US for the old iPhone 3G, that isn't the case here.

It'll still cost £96.89 on an 18-month contract - and I can't see cash-strapped young phone fans rushing to buy something that can't even claim to be the latest hot phone.

O2 was keen to point out that the 3G iPhone was now free on a 24-month contract - but are many people really willing to tie themselves in for that long?

Now Apple and O2 have never pretended that the iPhone is anything other than a premium product with a premium price and so far that strategy has proved remarkably successful.

One retailer told me this morning that people would still be queuing round the block when the new model goes on sale on 19 June. I'm not so sure. Those queues are usually made up of long-term Apple fanatics - but even they may not be willing to pay the huge price needed to become a 3GS early adopter.


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  • Comment number 1.

    I'm furious with O2. I have to wait 6 months to upgrade (I'm not buying myself out of the contract) and by then another iPhone will probably be 6 months round the corner, so I don't have any intention of upgrading to the 3G-S. The tethering plans are also a joke. Unfortunately we have no choice at the moment, but when the exclusivity ends, iPhone fans will hopefully vote with their feet and ditch O2. If O2 had a reasonable upgrade solution, perhaps they could have locked their iPhone customers into a longer contract and avoided this.

  • Comment number 2.

    The issue here isn't just one of cost - when the iPhone came out it was a sensation and revitalised a stagnant market. Ditto the 3G with the launch of the App store. I was critical at the time but fair play to Apple - they got it absolutely right.

    However, now the market has moved on and other manufacturers offer handsets which are comparable to the iPhone - and by that I mean that the iPhone no longer has the differentiation it had; it's just one of many good phones out there or coming out. The same applies to App stores - Apple's still leads the way but the pack are catching up rapidly and that lead isn't going to last.

    That said, the cost isn't going to help. You would have thought O2 would have learned from the first generation iPhone and its rather poor showing due to the asking price at the time which they quickly had to chop.

    There will inevitably be lines to get the new iPhone. I just don't think they'll be as big as they were before and they won't last as long.

  • Comment number 3.

    Apple 'fans' already have the iPhone, and if o2 are not going to provide an upgrade path like they did last time, then they may find very few people are in that queue.

    Apple or most likely o2 UK are in grave danger of badly misjudging the launch this time around.

    Last time o2 went over and above what was expected by offering the upgrade deal they did, but I thought that was the kind of service they had to offer to be associated with Apple, if they are going to stick to their bog standard small print (which they have every right too, after all anyone who owns one agreed to it when they signed up) then it kind of feels less than a perfect experience, and somewhat sours the feeling of owning this premium product.

  • Comment number 4.

    I should also point out that I'm unsure why people are angry at O2 - an 18 month contract is for, well, 18 months. This was made clear at the time.

    Yer pays yer money and yer takes yer choice as they say.

  • Comment number 5.

    I understand people being angry about the price, it is steep, but the complaints from those already with contracts seem odd. Every single mobile phone company out there does this with every single phone. If you want a new one for free or subsidised then you have to buy out your contract or wait. Why would people expect O2 to do any different here?

  • Comment number 6.

    It would cost me about £800 to upgrade to the 3GS from my 3G; or I'd wait 6 months until I was out of contract - but by then another iPhone would be 6 months away.

    O2 need to align their upgrade cycle with the iPhone upgrade cycle - surely not too much to ask?

    I switched to O2 after 15 years at Vodafone; O2 have just ensured that when exclusivity ends they will lose a lot of customers.

  • Comment number 7.

    Should we really blame Apple for the way O2 are alienating their existing customer base?

    Do Apple have a say on how O2 package the iphone once Apple has sold the handsets to O2?

  • Comment number 8.

    I think the differentiation is that these things aren't phones anymore, they're small computers. Computer users have long upgraded cyclically (moaning about the price, but still doing it) - it seems absurd to charge existing customers more than new ones in the computer world, but phone companies have long done this. The markets are merging and they won't be able to get away with it for much longer.

    Honestly, give me an iPhone without the phone bit and I'd have my money out ready.

  • Comment number 9.

    @Mark and Dave - I'm pretty sure we all understand that an 18 month contract is an 18 month contract. However at the launch of the 3G model O2 offered an upgrade for v1 customers and have set expectations accordingly.

  • Comment number 10.

    Apple is not at fault here at all; Apple have a very aggressive marketing strategy and Apple fans know that, but that doesn't work on a phone contract, and we as customers thought O2 understood that the first time round updating the iPhone to iPhone 3G. I paid my way and extended my contract and happily too. They set a bar that now they don't want to keep.

    if they weren't to carry on then they should never of done it in the first place. We are right to expect it, why not? The people are at fault here are O2.

    We are in recession and keeping customers is their number 1 priority, but they are going to find a lot of customers leaving them.

    With various other phones on the market now competing against the iPhone (Android, Palm Pre, Blackberry Storm) there is more than enough choice

    I know if they don't rectify this then I WILL be moving providers.

  • Comment number 11.

    OK, the iPhone's quite good. But it is clearly **NOT** the best on the market, so anyone who agrees to pay the massively inflated price is, in my view, a bit dim... You can get much better/more reliable phones for much less, and it's only days now until the N97's UK launch which will be so much better than the iPhone 3GS.... but how funny, O2 have said they're not going to sell it through their direct channels.

    Are they scared people will realise how much better it is than the iPhone, and then buy an N97 instead, thus angering Daddy Apple who will take the sweeties off O2 and give them to Orange??

    Bang goes my plan of phoning up and saying "I'm leaving, can I have my PAC please? Oh right, well, give me an N97 and I might stay..." oh well, I'll just have to wait until they U-turn like they did on the N96!

  • Comment number 12.

    @dave_sparrow : very good point. Anyone who thinks they're "special" just because they bought an iPhone really needs to think again. You bought a phone (actually, substitute that for ANY PRODUCT), and then a newer one came out later. Well, duh!

  • Comment number 13.

    I am an iPhone user

    I am amazed at the upgrade options published this morning

    Great new hardware that I want to use - oh dear, I still have 11 months left on my current deal and I'll have to buy out of that to enter into ANOTHER 18 month contract and probably have this grief in a year.

    Ever felt like you have been cheated!


    The mighty Apple publicity machine is going to have a tough job burying this one.

    Apple products have always been worth the extra few quid - but this is bleeding us dry...

    No thanks.

  • Comment number 14.

    The simple option is to get the payg version for £440 and swap the sims between the old 3G and the new 3GS. I get free internet on both and can continue the existing contract until the end and next June (If another new phone is out) get another upgrade for free as the contract will have expired by then. At this stage it is pointless to pay off the contract and start a new 18 month as the same is going to happen next year.

    Not a great move by O2 as they gave the original customers the upgrade free last year allowing them to break the contracts.

  • Comment number 15.

    It is unrealistic to expect O2 to write off the subsidy on the 3G, but you have to ask why O2 was offering subsidised iPhones to existing contract holders in the first place? To now charge what seems like an unsubsidised handset price, and ask contract holders to buy themselves out is bound to ruffle a few feathers.

    And there are some of us who are still on 2G contracts, having paid £330 for our handsets. Last week I could have gotten a subsidised 3G handset and a brand new contract, this week I have to buy myself out and spend £200+ on a new handset.

    IMO, O2 should be offering new contracts and phones at the list price to anyone with less than six months to run on an 18 month plus contract. It's good business sense - you're locking in customers for another 18 months and selling them a largely unsubsidised new phone.

  • Comment number 16.

    I currently need a new phone and, due to flooding a new ipod, however I'll be better off buying them seperately. I was in waiting for the new iphone, and actually put off my phone purchase from earlier this year. I expected a premium for the new model, the quoted prices are OTT and there's no way I'll be paying them.

  • Comment number 17.

    I have absolutely no qualms with O2 having a standard pricing, as many people have said if you buy a phone you're in a contract for 18 months - Fair enough. The lack of an option to upgrade without it costing the earth, especially in a credit crunch, i don't be ANY means believe i would get it for free but for me to upgrade to the 3GS it would cost 6 x £45 + the price for the handset and a new 18 month commitment, or a new 24 month commitment. Its just ridiculous the majority of people who want the 3GS already have the 3G and will be unable to upgrade without a big financial commitment behind it.

  • Comment number 18.

    @Mark and Dave and Hedley

    The way this should really work is O2 should waiver the remaining 6 months (or at least let us just pay off the subsidies) and let us purchase the new phone at the same price as everyone else who is new to O2 provided we agree to the same contract length as the new customers. That way O2 haven't lost anything, infact they've gained our guaranteed custom for the next 2 years (or however long the contracts are this time), rather than just the next 6 months, seems like a pretty good deal to me!

  • Comment number 19.

    the levels of apple-fanboy-ism are too high.

    people who have had a phone with all sorts of impressive features are complaining because 6 months into their 18 month contracts, their network will not simply give them the new version of the phone, which finally has the ability to make videos and forward text messages.

    what makes apple fanboys think they are more special than normal mobile consumers.

    o2 paid a lot of money to get exclusivity of the iphone, so why should their standard revenue streams (normal mobile contracts) be used to subsidise apple fan boys who depite having their phone for a few months want the newest version as it has a couple of added features.

  • Comment number 20.

    I understand o2 are a business, but i agree that once the exclucive deal between o2 and Apple ends, o2 could be in trouble.

    O2 priced the SIM free version of the 3Gs very cleverly. - 32GB Version is £540 ish. People on iPhone 3G have minimum 7 months left. Which means £245 minimum to buy out of your contract plus £280 for the new phone (on new contract) equals £525.

    I dont expect something for nothing, but be reasonable.

  • Comment number 21.

    jonbounds, an iPhone without the phone bit already exists- it's called an iPod Touch!

  • Comment number 22.

    richard_blog: I suspect that O2 is registering hardware against SIMs, and your plan may not work.

  • Comment number 23.

    Why are people so angry?!?! If you buy a Nokia and a new one comes out, you dont suddenly get a new handset.

    Its business and some people need to deal with that fact!!

  • Comment number 24.

    I was going to upgrade to this new iPhone, but with O2's ridiculous pricing policy I think I will go elsewhere, I hope others do likewise. That way with a bit of luck next time round they wont be so greedy.

  • Comment number 25.

    Who cares? It's just a telephone!

  • Comment number 26.

    "Honestly, give me an iPhone without the phone bit and I'd have my money out ready."

    That's called an iPod Touch. You can already buy them.

  • Comment number 27.

    As one of the early adopters of the first generation iPhone, I made a decision to skip the last one and wait for version 3. This has tied in quite well as the 18 months contract finished recently, so I have no problem paying again for the 3GS.

  • Comment number 28.

    Why do iPhone users think they are so special that they should get discounted or free upgrades? When you sign an 18 month contract you have to wait until that contract is finished to upgrade, or, pay the remainder of your contract to cancel it. This is the case with every contract currently available in UK so why do they think they are different?

  • Comment number 29.

    I would dearly love an iPhone of any description, and I'd be happy to pay a substantial amount as a one-off to own the device (as I have done for a 32GB first-generation iPod touch). But the real killer with the iPhone, which makes it impossible for me to justify one, is the price of the contract.

    Apple is keen to encourage more people to get an iPhone, and keeps reducing the price of the device (in the US at least) to achieve that. But that seems to me to be completely missing the point. The problem is not how much it costs to buy the thing itself; it's how much it costs on an ongoing basis to own and use it. The monthly contracts are all unreasonably, unjustifiably expensive for anyone who doesn't spend their lives with a phone glued to their ear or use a mobile phone in business. My own desire for an iPhone is to have it as a PDA with loads of cool features that syncs with my Mac. I'd want to use it as a phone as well, but only very occasionally; so occasionally that buying one is just not an option with the current plans.

    What I want is the option to have a pay-as-you-go contract; even one that makes calls relatively expensive. My current (ancient) mobile phone can be topped up with credit at any time, and that credit doesn't expire. That's what I want with an iPhone, pure and simple. O2 does offer a Pay-and-Go option, but that's a con because you're required to spend at least £10 per month on it, and your credit expires if you don't use it up, which is totally unacceptable. Using Pay-and-Go is pretty much like having a half-price monthly contract. There's a very clear lower limit on what you can spend on it (minimum £120 per year), but no upper limit. Well, I'm not willing to pay £120 per year for the privilege of making approximately one mobile phone call every three months (which is about all I manage, given that I work from home with a fixed-line phone on my desk).

    If O2 would offer a *genuine* pay-as-you-go service, with credit that doesn't expire (that's the key thing), then I'm sure that it'd suddenly find people queuing up in large numbers to buy an iPhone at a higher price than the top-of-the-range iPod touch. I'd certainly buy one without hesitation under those circumstances.

  • Comment number 30.

    I'm with badgercourage: "Who cares? It's just a telephone!"

  • Comment number 31.

    I'm not entirely sure I understand the fuss. It's a new product with new features and greater capacity. Of course it's going to cost to upgrade. And why would you want to? I'm more than happy with my 3G - and will be more so when OS3.0 is released, for free.

    Existing customers are getting a free upgrade with copy & paste and MMS and other features added when the software is released. What other phone gives us this? When I had a Windows smartphone the upgrades to the OS were few and far between and hard to install. On the iPhone they're regular and simple. Most people on Windows smartphones have to pay to upgrade, but we're gettin OS3.0 for free. Next week I'll plug my phone in to my computer and within minutes I'll have a load of new features I never expected and never paid for. That's pretty good, in my book.

    I bought this iPhone on the understanding that it had no MMS and no copy & paste and I was happy with it - and with my 18 month contract. It's still a brilliant phone, I still get very good service from O2, I get better reception than I did my previous provider (and better than my brother's provider). I don't need to upgrade. I'm happy with the camera, which I rarely use, and I don't need a compass. Battery life has been fine for me.

    The other thing to bear in mind is that O2 bashing won't help when they're at the whims of Apple to some extent... and we all bought in to the iPhone *knowing* Apple's upgrade policy. Any Apple fan-boy knows that they release new versions or lower prices every six months. Am I alone in buying things when the price and features fit my budget and my needs? If it's too expensive or not yet good enough I just wait six months and Apple drop prices or update things. If your phone does what you need it to and you can afford it then what's the issue?

    I just don't understand a) the rush to upgrade and b) people expecting a new phone and - in effect - a new iPod with greater capacity while expecting not to pay anything for it. With every other phone I've ever had I've had to wait until the end of the contract for an upgrade or had to pay more. The difference is, this is the first time I've been happy enough with my phone and the regular free upgrades to the way it works to not want to upgrade.

    Oh dear - I do sound a bit irrational in this post. I should remember never to argue on the internet.

  • Comment number 32.

    Hold on, something HAS to be wrong here...

    O2 has the same (old) iPhone listed at 2 prices...

    Lists the 8GB (3G) as STILL being FREE on £35/mo (16GB for £57)


    Lists the 8GB (3G) as now costing £96 on £35/mo

    So unless I'm missing something really obvious O2, yet again, prove that they haven't a clue by INCREASING the price of the old phone instead of reducing it??? What's that all about?

  • Comment number 33.

    Who on Earth is going to sign up to a 24 month, £45 contract to get a 'free' iPhone knowing they will have this problem next year? O2 have killed their own tariff and are encouraging customers to sign up to a shoter 18 month contract at most.

    O2 have let their customers down in several ways:

    They've silently changed the rules on upgrades causing customers to feel cheated.

    They've significantly upset the early adopters who switched to O2 especially for the iPhone. All their loyalty has been wiped out.

    Other phones are announced months ahead of launch (e.g. Nokia N97) so potential buyers know to hold out rather than sign up to a new 18 month contract. How many people bought an iPhone 3G in the last 3 months based on O2's store staff advice that no iPhone is coming (I was told this 13 days ago!)

    12 month product upgrades, 18-24 month contracts with no fair upgrade path and Apple 'fanatics' is a recipe for disaster.

  • Comment number 34.

    I have an iPhone, i really like it. Everyone i know who were not sure of buying one have been converted once they have bought it, and the more apps they discover the more they enjoy it.

    Just to remind folks, you took out an 18 month contract! Dont blame O2 or Apple just because you want a shiney new phone but dont want to pay for it! I dont see Nokia or Sony getting this kind of stick when they bring out a new phone.

    The cost of the o2 tethering - well that is a rip off. I hope no one subscribes to it and they lower the cost.

  • Comment number 35.

    @CompactDistance iPod Touch has no camera, and you can only use it in wifi range

  • Comment number 36.

    If you're an existing O2 customer wanting to upgrade, let them know how you feel via the the petiion on the O2 forum

  • Comment number 37.

    I think people are also forgetting that much of the features described at WWDC yesterday will still be available on the 3G and some even on the original iPhone - its software, which we all get as a free update on the same day.

    Hardware wise the update includes a few cheesy extras, which if I were buying new today I would consider, but not neccesarily buy tho.

    The 3GS seems to be a stop gap product, something to compete directly with the newer smartphones to keep the Apple stock prices up. The iPhone 4 is going to need a lot of money to develop and really we dont know what technology it should have in it yet. Banks are tight as you like right now, so they want to finance it internally no doubt.

    I think a lot of people will be less irate when they see iPhone OS 3.0 running on their existing 3G, and much of this "distress" is due to people not fully understanding the difference between the hardware and the software capabilities. Your "old" 3G isn't useless yet!

  • Comment number 38.

    The 3Gs is improved hardware, but don't forget the 3.0 software will give the existing 3G user an enhanced phone... what other phone manufacturer pumps out software improvements like Apple?

    If it matters to have the improved camera/video and a digital compass etc. that much then people are going to have to pay for it... I think this article is a bit of a storm in a teacup...

  • Comment number 39.

    jonbounds it may have no camera, but without a phone of course you can only go on the Internet within range of wifi networks!

  • Comment number 40.

    just to add, if anyone is a villain here, it is apple

    I have been an 02 customer for 5 years and was due an upgrade 2 months ago. When I asked retentions for a reconditioned iphone 3g I was told that APPLE WILL NOT ALLOW o2 to discount line rental on ipohnes, even for loyal customers phoning the retentions department.

    so rather than paying £35 per month in line rental for the privilege of having an iphone, I am instead paying £15 per month for the same package with a nokia N96.

  • Comment number 41.

    I can't really add much to what has been said. Upgrade cost too steep. I won't be upgrading. Why is the cost of the 8gb not been reduced. Who would be silly enough to buy it at that price.

    The big problem I think will come when Apple realise UK sales (their second biggest market) drop through the floor. Would like to see O2's exclusivity removed - that really would be karma.

  • Comment number 42.

    I think what all this demonstrates is what a phenomenal job Apple have done of instilling fierce (blind) brand loyalty amongst their legions of fans. All those early adopters of the original iPhone, who are now furious with o2 for the costly upgrade path, could have just bought a different phone 2 years ago that gave them many of the features that the iPhone is only now getting. OK, so the touch screen is in a class of its own, and the App Store is a killer app in itself, but many of the new features, like MMS messaging, video capture, copy & paste and so on, have been available on other manufacturers' handsets for years, but that fact seems to get completely ignored when these features are 'revealed' in Apple's keynote presentations.

  • Comment number 43.

    For a while there, this was almost a tech blog. However, you've now gone back to being a fanboy blog*, with four out of the last seven posts being Apple-related. I no longer see any point in the RSS feed taking up valuable resources in my browser.

    *or possibly a cynical, tabloid, fanboy vs anti-fanboy rabble-rousing blog

  • Comment number 44.

    O2 can do what they want as they have no competition in this market (UK iphone sales), all we can do is vote with our feet and avoid a purchase. Until anti-competitive practices like this are eliminated then it will be the usual rip off UK for the consumer. This is only one small example of the nature of the UK market (mobile companies, energy companies, low cost airlines, banks etc..) where UK consumers have a poor deal, of course the government are too busy with other important issues like tax evasion, moats or duck houses to care!

  • Comment number 45.

    Hedley and others:

    I understand what you're saying but the pricing models for the iPhone and iPhone 3G are very different in terms of how the subsidy on the iPhone is delivered to Apple - in the iPhone it was up front, in the 3G the cost was absorbed over the 18 month contract.

    Those of you complaining should really go back and read your contracts because that's what you willingly signed up to. The only people to blame in this instance are yourselves if you're unhappy.

    I'd also point out that when the iPhone comes to other providers that they'll operate in exactly the same way as O2 have - if you sign an 18 month contract then you'll be liable for it, regardless of Apple's refresh cycle.

    So no, O2 shouldn't let you off and are being perfectly fair and upfront because if they let you carry your agreement forward then they:

    a) Lose money
    b) Have to put up with the same piteous whining when the next refresh comes round.

    Caveat emptor, people.

  • Comment number 46.

    I don't know anything about Phones & Networks so I stand to be corrected. Since France does not permit exclusive contracts on 'phones, why not buy a unlocked iPhone in France, bring to the UK and use, say, the Virgin Media £10 per month, unlimited calls "sim card" only contract

  • Comment number 47.

    I do not expect a new iPhone as a current user - far from it. What I do expect is the ability to upgrade my phone without the need to "buy out".

    I would happily pay for a new phone but to be told I cannot even do that unless I fork out to "buy out".

    O2 have misjudged this badly - a simple single payment upgrade price per contract type is all that was necessary....

    Bad call......

  • Comment number 48.

    It's not the fact that o2 s making people buy out their contacts. That to be honest is to be expected. It's the outragous price of the hardware. My Original iPhone contract is up for renewal now. I didn't get one of the 3G ones, so to upgrade to a 16Gb 3GS iPhone is going to cost nearly £200. That is where my outrage is. It has an air of anti-competitiveness about it.

  • Comment number 49.

    "does any other commercial business have fans not consumers?"

    Try every company in the video games console market. ESPECIALLY Nintendo.

  • Comment number 50.

    Whilst I am angry at the costing of everything, people need to realise that O2 aren't soing anything that every other phone company does. Just because it's the iPhone doesn't mean you should get a preferential rate. If you had a Nokia N phone with Vodafone say, and then the new Nokia N series comes out, would you expect to be allowed out of the CONTRACT you entered into in order to get the latest phone? No! Everyone has to wait to upgrade or buy out to upgrade. That's just the way it goes. The iPhone and Apple are just another option in the market.

    If anything i'm angry at Apple for making 3 generations of a phone in two years when they could have created the 3GS from the outset. Whilst i love my 3G phone, it is lacking basic features of other phones which have been out a lot longer.

    But having said that, the 3.0 OS that comes out this month will rectify most of those issues making the 3G iPhone even better. I can live without a 3.2mp camera and video recording. The Voice control sounds impressive but, let's face it, will be buggy as all voice control is. And a compass?!?!?! Who the hell needs a compass on their phone? If you are someone that has genuine use for a compass, then you will already have one and it would probably be a lot better!!

  • Comment number 51.


    There are not always settings available for other UK networks meaning the user will not always be able take advantage of all the features. And, they will get charges vast data charges unless they have good data bolt ons

  • Comment number 52.

    @ Jaffa - the compass (in conjuction with GPS) will enable all sorts of clever apps to be written. Look up Wikitude on the Android platform for an example.

  • Comment number 53.

    Wow. Just wow. Talk about the amount of brainwashed "ooh it shines!!!" people commenting on this!

    Apple don't deserve the type of fan boys it gets. It's crazy, because a lot of their marketing scheme is delivered around telling intricate little lies, but gets this crazy deluded fan base.

    But as you can see...:

    They are no different to M$, Nokia, Sony, etc...

    Here's the big shocker:


    If you don't like it, tough!

    And lol@the bashing at O2. O2 probably provides the best service in this country in terms of telecoms, especially in the broadband sector (Be Broadband included). I don't even use them for any telco service - but gosh I wish I did!

  • Comment number 54.

    The pricing policy stinks! I only got my iphone 3g in March. But, I am really looking forward to the software upgrade. Ok so I wont have a serviceable camera, but the OS software upgrade gives me most of the new features. And stuff like mms, cut and paste, pairing with laptops and bluetooth stereo will come in v handy!

  • Comment number 55.

    Smells like a monopoly to me. Wonder what the Office of Fair Trading have to say on this, if anything. My O2 contract expired 2 months ago and I've been waiting for the new iPhone to be announced as I knew it was coming. But at this price for a new iPhone phone & contract - I'm shopping for a new provider. There are other phones out there and this price just isn't worth it.

  • Comment number 56.

    It is standard practice for all service providers to charge for an upgrade if you are part way through a contract so I don't have any problem with that.

    Yes we got free upgrades last time but O2 also got to tie us in to new 18 month contracts. Tit for tat. This time there is no freebie, fair enough, but not only do they want us to again sign new 18 month agreements, we will also have to buyout our existing contracts. You usually only have to buyout your contract if you are moving to a different provider, why should it be any different for the iphone?

    If I do decide to buyout my O2 contract, it won't be to upgrade to the 3GS but to take my custom elsewhere.

  • Comment number 57.

    It looks like you can still get the old one on the old price. Seems like an attractive option right now.

  • Comment number 58.


    Presumably the Virgin "simcard only" deal would allow you to make telephone calls and perhaps a separate deal with BT Cloud for WiFi would suffice.
    I assume this would work because the iPod Touch (which is just an iPhone w/o the telephone element) does work for many apps for the iPhone. Maybe only +-90% but you could avoid the hassle of a six month/ 1 year upgrade.
    Otherwise just an iPod Touch with Skype would be OK (assuming that it is likely to be upgraded to similar functionality as the iPhone in the near future)

  • Comment number 59.

    honestly, some of the people complaining about being in an 18 month contract really should go and look-up what the word contract means. Anyone who is older than 18 should really know the deal with tie-ins, and complaining is just laughable. Pay up your contract or wait, its as simple as that.

    On the serious point though - the price of the new iPhone 3GS is really high for what is basically a revamped (and slightly upgraded) 2 year old phone. I can see me getting one on import depending on the currency conversion.

  • Comment number 60.

    I'm going to buy one for myself and one for my wife on Pay as you go, some would say it's a lot of money, I guess it is but we are looking at it this way, your not getting just a phone, your getting all these:

    A handheld gaming device that has better game play than a Nintendo DS
    A top of the range music player
    A GPS device
    An Internet browser
    A sat nav
    A personal organiser
    A video player
    A camera
    A video camera
    A TV (BBC iPlayer)

    Take all the above gadgets and put them into one and this starts to look like a good price.

  • Comment number 61.

    As a customer I like o2. Their customer service is excellent so far and I get what I would consider a fair deal ... my iPhone costs £35 a month for 600 minutes and 500 texts and unlimited(ish) internet; I also get broadband at home for £7 from o2. I upgraded from version 1 of the iPhone to the 2nd generation last time around and signed up for another 18 months with o2.

    This time, however, they are going too far. o2's calculator seems faulty because they want £185 for a phone which costs US$199. My calculator says £125 is nearer the mark. Even adding a US sales tax doesn't alter the figure significantly and as all the phones are imported from China or wherever that shouldn't make a difference.

    Apple ... this isn't your fault and I'll be very pleased to download the free-of-charge 3.0 software but o2 are doing you a big disservice in the UK. In rip-off Britain I expect to pay a little more but Apple themselves moved to make their prices more UK/US compatible so why should we now be ripped-off by o2? Perhaps we should ask the Spaniards who, as Telefonica, own o2!

  • Comment number 62.

    "Take all the above gadgets and put them into one and this starts to look like a good price".... but when you consider that many other handsets on the market have most of these features, but come free on pretty much any tariff you like, surely you have to accept that Apple are just taking the pi$$?

  • Comment number 63.

    I'm a long time Apple fan and was planning to buy one of these for my wife. I can afford the price, but don't see why I should. I'll wait until O2 and Apple see sense.

  • Comment number 64.

    Ultimately a contract is a contract. When you sign up for 18 months it generally means 18 months. I know, I am tied in to 3 for another 5 months and they are the worst network by far.

    With the move towards the US model of 24 month contracts are they actually going to start offering 24 month warranties. Of course you could spend another £60 on Applecare. Kerching!

  • Comment number 65.

    Why can't O2 run a trade in programme for iPhone customers?

    Trade in your iPhone 3G as part of an upgrade programme, refurbish the old iPhone and sell it on as such to PAYG or cheaper contract customers, thus increasing their customer base and keeping existing customers happy?

    Apple already does brisk trade in refurb'd laptops and iPods via their online refurb store.

  • Comment number 66.

    lets be honest, the price tag an 18 month contract now attracts is a fully funded iphone - in fact it has substantial profit in it for apple so there is no subsidy. most of the monthly fee also goes to apple so o2 arent being greedy, apple are. when you consider the launch of the palm pre is around the corner and will probably be free at the same price point on most networks, i think apple are taking a big risk commanding sucha premium to be in the iphone owners club!

  • Comment number 67.

    My mate and I queued up last year. Neither of us will be queueing up this year. Last years queues were of fans and friends of fans.

    I love my iPhone. Yes I know that's sad, but I genuinely do. By far the best gadget I have ever bought. Yesterday I worked out my finances, trying to make it so that I would be able to afford the new iPhone that was going to be announced. OK when it was announced it wasn't the best refresh of the phone, but until this morning I was still planning on upgrading. Then I saw how much it was going to cost me. Far too much for not that much gain.

    Shame really as I had been over the moon with o2 before this.

  • Comment number 68.

    What's with the whining?

    The same reaction occurred with the launch of the 3G - let's face it, early adopters are going to be paying through the roof.

    Personally speaking it cost me "a lot" to switch from my "provider at the time" to take advantage of the original iPhone - but it was worth it! As a long time Apple advocate (10 years) the experience (personal and technical) is spot-on.

    The sale of my original iPhone on eBay more than covered the cost of the 3G - and the same is highly likely from the sale of my 3G for the 3GS.

    The only real gripe I have is with the tethering plans - but I can buy into that as and when required.

    Bring it on and stop the constant moaning people!

  • Comment number 69.

    Those who have an iPhone 3G. You have an asset which is still worth a fair amount. You can sell your iPhone 3G to one of the phone recycling companies for about £200. Probably £250 or more on ebay.

    Put the same amount towards a new 3G S (which is what you'd have to fork out if you took a new contract anyway) and your done, plus you stay on your existing contract.

    Maybe O2 could offer to recycle the phones on customers behalf and give a guaranteed value plus a small subsidy (1 month free line rental). That might be enough of a carrot?

    Just a thought.

  • Comment number 70.

    Some of the comments here laughable - people saying that they "have to pay" so much for an upgrade now, when I'm sure they've been perfectly happy with their iPhones up until the new one was announced. On top of that, they then vilify O2 with phrases like "in a recession", implying that O2 should be making an exception for iPhone customers as opposed to a fairly standard upgrade policy - one that was signed up to when people got their contracts!

    More importantly, in a recession people should be watching their own spending - a slightly faster iPhone is not exactly a mandatory purchase. If a new iPhone hadn't been announced, no-one would have been floundering and gasping around like a fish out of water, they would have just been as content as ever.

    The people complaining loudest are those who "have" to have the newest and best - in which case you should be prepared to pay for that attitude.

  • Comment number 71.

    Good lord, look at you sad, whining apple fanboys, all i can see from this blog is:

    "boohoo.... i signed this 18 month contract less than 12 months ago and those nasty people at o2 won't let me break it to get my new iphone which does only slightly more than what my current iphone does." Wow.... when you write it down it does look like pathetic whining!

    I can understand the anger though, honestly i do. As you must be so angry at yourselves because all apple do is go "look at the shiny shiny" and you all go running like rats to the pied piper. They have been doing this for years with their ipods and you seem hurt and angry with o2 for some wierd reason because apple are doing the same with the phones they are making

  • Comment number 72.

    O2 is a victim of its own success here. There was a huge amount of hype around the iPhone and iPhone 3G when they were launched, and a lot of coverage in the media that just didn't happen for any other phone. A lot of iPhones were sold because O2 essentially had free advertising. The spotlight was on them when the message was good and it's still on them now that the message is bad.

    The problem is the exclusivity contract between Apple and O2, which means that voting with your feet means choosing another handset. Current iPhone owners are also locked in - O2 refuse to unlock iPhones for use with other carriers at the end of a contract, which is against OFCOM recommendations and not the case for any other handset that they offer.

    A major UK online retailer sells the iPhone 3G SIM-free and unlocked. They are expensive, but they can be used with any carrier and are not subject to O2's terms and conditions. Hopefully the new model will also be available through this channel.

  • Comment number 73.

    I'm a little miffed, as I just swapped over from Vodafone to O2 for the 3G iphone. I did ask about the new iphone but it was all just rumours at the time. No one knew anything concrete really. So I just decided to sign on the dotted line.

    If I waited another month I would've been a very happy chappy, but as some have already said, you're not getting that much more than what you will get with the 3.0 firmware. Better battery life 'upto' 2x faster application load times, better camera, video recording and compass.

    Its not a lot really. The voice recogition is that only on the 3GS?

    If you consider what actual extras I've lost out on it, its not big deal.

  • Comment number 74.

    Under the sarcasm VidicTheDestroyer does hide a valid point. Current iPhone owners were happy with their phone. They now have this perception that bunging a compass and a video camera on to the new model suddenly makes them lumbered with a obsolete paperweight.

    Look at the history of Apple's product deployment. They are serial releasers at least once every 12 months on each product line. This does not make your current device any less of a beast than it was yesterday. Only your perception has changed and not iReality. If you do move on to the 3GS then iPhone 4 will land in about 12 months and then you will be in the same situation again.

    Apple are a company geared towards profit, not a brand, not a lifestyle choice, not a cool friend but a large corporation just like every other one out there just with more rounded corners.

  • Comment number 75.

    Is this the day the iPhone becomes an iCon?

  • Comment number 76.

    I'm not angry at Apple per say, they have released a great piece of evolutionarily technology, I'm more angry with 02 for the ludicrous way they are dealing with the pricing structure and lack of 'reasonable' upgrade fees for existing iPhone users.

    I'm not looking for something for nothing here I'm willing to pay an upgrade fee to the iPhone 3GS (say £99) even if it means extending my current contract for another 18 months, the iPhone to me IS that good a device. The iPhone has changed the perception of what a phone should be, and as the iPod did before it with the music industry, the iPhone has the potential to change how carriers operate not just for iPhone users but for everyone and the industry as a whole.

    I've seen the various blog posts, tweets and petitions (which I've signed) talking about this issue but one tweet sums it up for me. The iPhone killer comes not from another handset but from a carrier... O2 to be more precise.

    To use an Apple slogan... O2 need to 'Think Different'... or face the consequences.

  • Comment number 77.

    For those suggesting that iPod Touch = iPhone without phone ... what about the missing
    (compass - in 3GS)

  • Comment number 78.

    Apple didn't anger the fans: O2 Angered their customers.

    I was going to get an iPhone 3GS but it would cost me £514. It's the exact same cost as running my current contract alongside a brand new contract with a new phone on it, only I don't get the minutes of the cancelled account.

    This is what happens when you have a 12 month product cycle and an 18 month contract.

  • Comment number 79.

    Get a life.

  • Comment number 80.

    @jonbounds (#8)

    There already is an iPhone without the phone. It's called the iPod Touch

  • Comment number 81.

    Why the hell are so many people blaming o2 for the upgrade costs?? Do you see o2 applying similarly ridiculous terms to other manufacturers' handsets? Well??

  • Comment number 82.

    The issue is not the length of the contract but the fact that the vast majority of iPhone 3G owners are Apple fans and O2 is alienating them by not providing a reasonable upgrade path.

    By all means levy a charge or extend the contract term but to have no upgrade path is just going to annoy a huge percentage of customers.

    This will come back to haunt them if the iPhone becomes available on an alternative provider in the future.

    Me, Im buying one on Pay as you go and not renewing my contract in January. That way if the next iPhone is available elsewhere O2 will lose my business.

  • Comment number 83.

    I don't understand those existing iPhone customers, mid-contract, who seem to expect O2, the service provider with whom THEY VOLUNTARILY entered into a fixed-term contact, should now rip up the paperwork and allow them to start all over again without penalty. Granted O2 allowed it with the launch of the 3G variant but that should not be taken as a given.

    You have a contract, legally enforceable, and you should lump it like the rest of us. I have an 18 month T-Mobile contract with about 12 months left to go. I don't expect T-Mobile to suddenly end the thing early and allow me to upgrade my handset just because I want the latest new model.

    Perhaps I should try it with my mortgage provider...tell them I need a new house now and my existing mortgage should be written off as I need a new house NOW!

    Turning to the 3GS model, I'm disappointed to be honest. Little tangible benefits. Yes there's some "under the hood" tweaks to speed things up but the camera is still shockingly poor compared to the latest Samsung and Sony Ericsson models being released.

    The one thing in the iPhone's favour is the glorious user interface, something which even I (an anti-Appleite!) admire.

    But sooner or later some iPhoners will realise the likes of Samsung, Sony Ericsson, Palm, HTC et all are all banging on the door. Indeed, the very soon to be launched Nokia N97 is surely one of the closest rivals for the iPhone and it will be interesting to see how sales of this device (which matches or in some cases exceeds the iPhone's capability) fare.

  • Comment number 84.

    @ vidicthedestroyer

    You must be a riot amongst friends...

    @ aptonline

    Spot on - for O2 to expect customers to "Buy out" there contracts BEFORE splashing out on a 3GS is commercial suicide. When iPhone 3G was announced 1 gen owners had an upgrade path that worked and brought more customers to the table with what seemed a great way to stay on top of the technology.
    Nominal fee - restart your contract = perfect

    As it stands a lot of iPhone user will have to wait longer than the NEXT revision of the phone is available - stupid.

    Potential customers will be driven away by what looks like a contract trap and nothing more.....

  • Comment number 85.

    Wonder if anyone can help me with my Dilemma
    Just paid out my contract with orange got PAC code.
    Just about to but new iphone on contract with 02.
    Going to Washinton 26th June shall I buy one there or here and what are the benefits/drawbacks

    Thank you

  • Comment number 86.

    This is all a bit silly - people are drawing comparisons to the introduction of the 3G when original iPhone owners were offered cheap upgrades, but those owners had previously paid FULL PRICE for the first generation iPhones and taken no subsidy from O2 whatsoever, so when they upgraded they got the same price as every other "new" customer taking on a new *subsidised* handset. Once you do that, of course you're tied into the new contract and of course you have to pay to get out of it, because you owe O2 for the cost of that subsidy.

    I do agree the new iPhone's aren't competitively priced over here and O2 are in danger of losing custom over that, but that's a commercial decision by O2 and customers will simply vote with their feet.

  • Comment number 87.

    Would the "contract trap" you refer to be the legally binding document iPhone users happily agreed to when they signed up??

    Findlay Colquhoun sums it up pretty well with the mortgage analogy - why should consumers expect a contract on an Apple product (ooh, shiny shiny) to be less legally valid, or binding, than any other contract?

  • Comment number 88.

    O2's upgrade policies certainly aren't as good as my last provider (Orange) - but lets face it, no other provider has a 'phone as good as the iPhone. I probably won't leave O2 - but unless I switch to the Palm Pre in January I think I'll be skipping an iPhone generation as well.


  • Comment number 89.

    I have a number of issues here. As an iPhone owner, most of what I want is in OS3, not the new phone and I get that for free.

    Essentially for me I'm being propositioned to fork out a lot of money for:
    A better camera - useless until they give it a flash
    A compass - fairly useless
    Tethering - useful if it runs on 3G but it doesn't, so useless
    Extra memory - quite useful
    Faster processing - I don't really notice speed problems that often

    So why on earth would I upgrade?

    I do however agree that I signed up for an 18 month contract and they don't have to let me out of it. But, like a lot of other people here, I'm just going to wait another 6 months and see what Apple comes out with next year so O2 just lost a sale.

  • Comment number 90.

    I am actually considering downgrading to an original iPhone or second-hand iPhone 3G (my own 3G was stolen last month, halfway through contract).

    The complete lack of a coherent, affordable upgrade path is a poor deal for loyal customers and reflects very badly on Apple and 02. And in the States, on AT&T.

  • Comment number 91.

    I just love the way that so many people cant just see that both companies are running Businesses to make money. Its what they do.

    My Mrs' Bought a Fiesta ST last year and Ford have just release a new Fiesta, does this mean she is entitled to the new model?


    I bought a Macbook in January and the Specs have been updated in the WWDC yesterday, am I entitled to a New one?


    I could go on all day with the examples but I won't. Some people just need to deal with the fact that this is how technology has always worked. When you buy something new, a newer version is always around the corner, you cant win!

  • Comment number 92.

    Not bothered about upgrading as I'll wait until iphone 2010 ... nothing in the new 3GS that makes me want to upgrade - but am very annoyed about O2 charging £15 per month for tethering and using the phone as a modem when I am already paying for unlimited internet use on the iphone and if I'm tethered I'm not sure what the difference is to using you tube or surfing the net or streaming radio or the rest. Given that I can get a mobile broadband dongle cheaper, why bother? O2 is being very greedy and has, as far as I can see, ruined its reputation with what was a pretty loyal base of customers. Good Job O2!

  • Comment number 93.

    Having just come off the phone from Orange retensions, they advised that the iPhone will be available on Orange within the next three months 'apparently'.

    Due to the number of people leaving Orange because they want the iPhone, apparently its a paperwork exercise now before it can become official.

    Ok - maybe this is just sales talk, to keep me as a customer, but surely Orange couldn't be so obvious by saying that the iPhone will be available?

    Has it actually been confirmed that O2 are still the exclusive iPhone supplier?

  • Comment number 94.

    @ TheTruthAbout

    It has been confirmed O2 are still exclusive but no one knows dates.

    Someone I know who works for Orange has been told they will be selling the 3G, but that was months ago.

  • Comment number 95.

    Here is the iPhone fan perspective:

    It is our intention to upgrade to EVERY major new version of the iPhone on launch day. We have shown that we are prepared to pay £620-720 per year to do this - including upgrade and monthly contract.

    O2 know this full well, and yet their pricing and contract structures do not accommodate for their most loyal customers.

  • Comment number 96.

    I understand what a contract is. I don't want a Nokia. But nobody with an iPhone 3G will have a contract coming to end right now, that is the problem, EVERYONE has at least 6 months to wait. I am prepared to pay to upgrade, but the situation O2 has created means that no existing iPhone 3G customer can get the new model without paying at least 6 months of their contract and risking missing the boat again 6 months later. That's the issue - the 3GS is limited to new customers only and the people who are most likely to want the new iPhone are those who already have one.

    For example, on £45 per month, the new phone is free on a 24 month contract, or £87 on an 18 month contract. Why can't O2 offer me the phone for £87 on a 24 month contract? They get their extra 6 months all the same.

  • Comment number 97.

    When Apple let o2 do the iPhone for "fre", they really did open this can of worms on themselves. The problem with "Free"* is that everyone thinks they can afford it.

    And in the same stroke takes Apples' reputation of creating quality exclusive products for the privileged few and grinds it to dust.

    They should have kept the 3g one at a cost, like the original iPhone.

    That way, those who could afford, had. Those who cannot, dont. Much like everything else. It's not a human right to be given stuff for free, nice things cost money.

    Mind, the concept of currency being exchanged for goods or services seems to becoming more and more misunderstood.

    I blame the retailers myself, luring in the slack-jawed luddites with "free" stuff, knowing full well that their target deemographic is far too naive to understand the mechanics of the system.


  • Comment number 98.

    As mentioned above, the real scandal is that O2 have doubled the price of the phone over the 3G for people outside of a contract. Those of us who didn't upgrade to a 3G - who O2 have effectively had nine months of free money anyway - suddenly have to pay twice as much or go to a two year contract.

    Why, when the price is unchanged in the US? Rip off Britain might actually mean something for once.

  • Comment number 99.

    I think what Apple are trying to establish is a base of customers that will enable them to launch a phone, to suit a set of contracts.

    For example, many people still have 6mths to wait until they can upgrade, but for those like me, who are out of contract with their providers, will change to provider for the iPhone.

    Therefore, once there is sufficient clients, Apple will be able to tailor their launches for the number of users.

    Obviously, 1G users got offered an upgrade, because it was in their interests to use the latest technology, which could also suggest Apple were possibly not happy with the original version.

    The software upgrade for existing 3G phones 'may' have been released to appease the 3G users, so they could bide their time until out of contract.

    Who knows!

    All I know is, I'm in that dilema of whether to wait and see if what Orange have said is true or jump ship to O2.

  • Comment number 100.

    I still have one of the first gen iPhones as Ive been waiting to upgrade to something different and exciting. For the meagre selection of added extras, this still aint it and Ive got better things to spend £185 on.

    E.g. It would be nice to have a web focussed phone that could actually browse Flash sites. Wouldnt this be a little more useful than a compass???


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