APPLE'S iPHONE went on sale through O2 and Carphone Warehouse stores in the Republic this morning with a high-profile marketing campaign to support its arrival, writes John Collins.
O2 hopes that the combined phone, music player and internet access device will drive up data revenues on its network in the face of a declining spend by subscribers. O2's average revenue per user (ARPU) in the fourth quarter was €45.70, down from €47 in the third quarter.
Stephen Mackarel, chief executive of Carphone Warehouse, believes that the iPhone will capture a larger market share here than it has done in the UK and US.
"In the UK, you can get a lot of high-end phones free," said Mr Mackarel. "Over here, people are used to paying for high-end phones, so the relative penetration will be a lot higher."
Mr Mackarel said that Carphone Warehouse had received more than 1,000 advance iPhone orders from its website alone.
Two versions of the iPhone have gone on sale: an 8GByte model, which retails for €399, and a 16GByte model, which costs €499. Customers will also have to sign up to an 18-month contract with O2, which will cost between €45 and €100, depending on the tariff chosen.
Some commentators have pointed out that the tariffs are much more expensive in the Republic than in Britain and Northern Ireland, where O2 also has an exclusive contract to sell the iPhone.
In the Republic, users can download 1GByte of data before additional charges apply, whereas in the UK there is no cap on downloads and O2 has struck a deal for free Wi-Fi access on The Cloud network.
In Northern Ireland, a €45 monthly tariff includes 600 minutes of talk-time and 500 texts, but you get just 175 minutes and 100 messages south of the Border. The €100 subscription buys an impressive 3,000 minutes and 500 texts from O2 UK, but just 700 minutes and 250 texts from its counterpart in the Republic.
Pat Phelan, the founder of Cubic Telecom, says there is no justification for the price differences as wholesale telecom charges are the same in both countries.
He has threatened that if O2 does not reduce its pricing he will organise a bus to take people to Northern Ireland to buy their phones and then unlock them to work on any network in the Republic.
"The minutes, the text bundles and the data package are completely inappropriate for Irish people and the massive difference in what Irish, British and Northern people get for the same price suggests that they'll throw any old scraps at the stupid Paddys," says Mr Phelan.
An O2 spokesman pointed out that the UK pricing had been reduced recently following a successful launch of the product.
Vodafone has responded to the introduction of the iPhone by slashing prices on its nearest competitor, the Nokia N95, to as little as €169, depending on the tariff. In addition to performing many of the same functions as the iPhone, the N95 connects to the very latest 3G networks based on the HSDPA protocol.
In its marketing Nokia has also been emphasising that its phone is more open than the iPhone because anyone can develop and release software which will run on it.
Apple only last week released a software developer kit (SDK) to allow third parties to develop software to run on the iPhone. Apple will approve the applications, sell them through iTunes and take 30 per cent of the revenues generated. According to Apple, 100,000 copies of the SDK were downloaded in the first four days.
