iPhones for Vodafone — and Telecom Italia, too
In dueling press releases, Vodafone and Telecom Italia announced on Tuesday that they have both signed contracts with Apple to carry the iPhone in Italy — the first sign that Apple may be relaxing its demands for revenue sharing with individual carriers in exchange for exclusivity.
The biggest deal is the one with Vodafone. Having lost the bidding war to carry the iPhone in its home market to O2, UK-based Vodafone (VOD) got its revenge with this terse, two-sentence press release:
“Vodafone today announced it has signed an agreement with Apple to sell the iPhone in ten of its markets around the globe. Later this year, Vodafone customers in Australia, the Czech Republic, Egypt, Greece, Italy, India, Portugal, New Zealand, South Africa and Turkey will be able to purchase the iPhone for use on the Vodafone network.” (link)
This is an important deal. Vodafone is the world’s second largest mobile phone carrier, after China Mobile. At the end of 2007 it had, through wholly owned and partially owned subsidiaries, the equivalent of 252 million customers in 66 countries.
Only 10 of those countries are covered by the deal announced on Tuesday, but they include some big ones. India, for example, has a population of 1.12 billion that is snapping up mobile phones at a blistering pace. The number of mobile phones in Italy reportedly exceeds its population. Piper Jaffray’s Gene Munster calculates that the Vodaphone deal nearly doubles the size of the iPhone’s available market, from 153 million potential subscribers today to 293 million once the 10 new countries are on board.
But most of the important details were missing from Vodafone’s press release. When does the deal start? Is it exclusive? Is there a revenue sharing agreement? Will Vodafone be selling first- or second-generation iPhones? (Some of the countries listed don’t have a 3G network.)
All of which made us wonder why Vodafone spilled the beans on this day, and in this way.
We didn’t have to wait long for an answer. It came in a press release from Telecom Italia (TI-A), which also announced on Tuesday that it had signed an agreement to carry the iPhone in Italy.
This marks the first time Apple (AAPL) has signed non-exclusive contracts with two carriers in the same country. European commentators are already asking whether Apple’s partners in other countries will now revolt against what some perceived as onerous terms. “This is definitely a sign Apple is capitulating,” Will Draper, an analyst at Execution told the Times of London. (link)
How many other non-exclusive deals are waiting in the wings? Probably just as many as it takes for Steve Jobs to comfortably beat his target of selling 10 million iPhones in calendar year 2008.
While here in Brazil, people keep buying iPhones in US and unlocking it. When they decide to arrive, it might be too late as those who could buy might have already done that…
Wow !!! Apple rocks !!!! They will sell 25millionplus iphones in 2009 for sure ! I see $500 per share in 2008 December.
This is simple apple sales are tanking in Europe because of its exclusivity deal. And lets not forget there are two better smartphones coming out. the samsung instinct and the touch diamond. this seems like desperation to me.
Umm could it be that the sales just tanked in UK and they need to open to other carriers? No devices has every made it tied to specific carriers. Europe is very open and users like to move their SIM to the best plan.
It does not say Apple is NOT getting carrier revenue from Vodafone & Telecom Italia but you’re pretty quick to presume? maybe they’ve doubled carrier revenue?
But even if they aren’t getting extra revenue - how much does Apple loses?
Nothing, iPhone sells at full price AND any additional revenue that NO ONE gets.
Elmer-De Witt is a tool. His last comment shows how far behind the curve he really is. Apple doesn’t need this Vodaphone deal to sell its 10 million target, it will use this deal to get to its unannounced 50 million target in 2008-2009.
With more positive news AAPL is down $1?? I don’t get it.
It is funny that the breakdown of Apple’s revenue sharing deal is seen by some commentators as a loss for Apple. I remember way back before the iPhone was released, there was a serious discussion about whether Apple could enter the market if they tried to sell a device that allowed users to use mobile broadband instead of mobile phone.
And so, the first gen iPhone was tied up in quite a few respects, to suit the telecom carriers. But that doesn’t mean this was best for Apple. It was just the quid pro quo of entering the mobile telecom market. Now Apple is in the market, and the telecos are facing general demand for mobile broadband. I think Apple are probably thrilled that they can now compete in the mobile broadband market, instead of the old mobile phone market.
DONY MISS THIS WHERE RBC ESTIMATES 14M IPHONES IN 2008 AND 24M IN 2009
Tripping Over Themselves! To sell this thing. Watch out World! Go Apple!
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Silicon Valley veterans like to joke that Steve Jobs must be surrounded by a reality distortion field; if you get too close to him, you start to believe what he's saying. Thanks to the success of the iPod, the launch of the iPhone and the renewed interest in the Mac, Apple has made believers out of millions of customers - and made a lot of investors rich. But Philip Elmer-DeWitt believes that an ounce of skepticism never hurts when writing about the company. He should know. He's been covering Apple - and watching Steve Jobs operate - since 1982, first for Time Magazine, then for Business 2.0, and now for Fortune.
If it wasn’t for Apple and the creative minds at the company, the samsung instinct would have been lost and the touch diamond…. well, that would just be plain charcoal”