O2 to launch Palm Pre “iPhone killer” in UK


O2 to launch Palm Pre “iPhone killer” in UK

Ian Grant

Mobile network operator O2 will launch the so-called "iPhone killer" Palm Pre on Friday and plans extend iPhone sales through the Phones 4U retail chain.

The moves follows O2sloss of its iPhone exclusivity in the UK. Orange will sell the iPhone from November, with Vodafone following in January.

Pre's entry will spice up the already hot smartphone market. Smartphones already account for more than a quarter of new phones sold, and they offer the highest margins, said market analyst Gartner.

Pre adds yet another software platform to the mobile mix that already includes Nokia's Symbian and Maemo, Apple's iPhone, Google's Android, Microsoft's Windows Mobile, Research in Motion's BlackBerry, and the LiMo (for Linux Mobile) favoured by Far Eastern phone makers.

Telefonica, O2's Spanish parent, and Palm signed an exclusive Pre distribution deal for Spain, United Kingdom, Ireland and Germany in July. Palm has been registering expressions of interest on a web site, but declined to say how many it had received.

The deal with Phones 4U will put iPhones 450 more stores from November, O2 said today. Customers will have both contract and pay as you go options. O2 and Carphone Warehouse channels will continue to offer iPhones.

The Phones 4U deal reinforced O2's position as "home of the smartphone," said Stephen Shurrock, O2's UK sales director.

Palm Pre is free to O2 customers on a two-year contract at £44.05/m and to customers on an 18-month contract for £73.41/m. All customers will have unlimited UK data browsing over O2's HSDPA network and unlimited access to 7,500 wi-fi hotspots through both The Cloud and BT Openzone.

In September analysts at investment bank JP Morgan said estimated Pre sales of 550,000 were "ahead of our estimate". A successful sale of $360m in new debt, analysts revising Palm's share price upwards, and existing shareholders increasing their holdings all suggested the Pre was doing better than expected.

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