Apple and Orange: iPhone deal to prompt a price war?

Apple has announced that the iPhone will now be available through mobile network operator Orange’s sales channels – ending O2’s exclusive’s rights to its distribution in the UK.

Rival operator Orange will sell iPhones in all Orange direct channels including Orange shops, the Orange webshop and Orange telesales channels, as well as ‘selected’ high street partners.

Although neither firm was commenting on pricing, some experts predict the wider availability will mean better prices and contracts for the consumer.

Ernest Doku, analyst at mobile phone price comparison website Omio.com, comments: “Opening up the iPhone to another network is sure to bring the price down and will finally enable those people who, until this point, have been unable or unwilling to change networks to get their hands on it.”

Doku recommends anyone thinking of buying an iPhone would do well to wait if a pricing battle between O2 and Orange begins. There is a strong possibility that shorter and more flexible contracts will be introduced.

“Rumours were rife that Orange was soon to secure the iPhone 3G, but the fact that the latest 3GS model will also be made available will put them on an equal footing with O2.

“What remains to be seen is whether Orange’s price point for the 3GS will be competitive enough to force a price war between the networks, and whether O2 will refocus attention on promoting the newly acquired rival, the Palm Pre, to sway those customers on the fence.”

“Orange has certainly hit the ground running following its announcement about the T-Mobile merger. Acquiring the coveted iPhone is sure to attract new customers and will also boost retention levels, as existing customers are bound to upgrade at the first opportunity,” he adds.