O2 May Give Free Apple (AAPL) iPhones In UK

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By Douglas A. McIntyre Published

O2, which has the exlusive distribution rights to the Apple (AAPL) iPhone in the UK, may give away free 3G versions of the handset when it comes out next week.

Why? If a customer is willing to take out a huge contract for cellular voice and data service, it may make sense for O2 to throw in the handset. Based in industry information, the cost of the new iPhone will be about $400. The carrier can charge its customers some portion or even all of that. Or, it can offer discounts or free phones to those who will shell out enough in user fees.

The London Telegraph writes that "O2, which has an exclusive agreement to distribute Apple’s iPhone in this country, is set to give away the 3G version of the handset to its highest-spending customers when it launches here next month."

O2 may find that the economy of giving away a $400 phone for a subscriber who will take out a $1,500 annual subscrition plan makes all the sense in the world.

Maybe AT&T (T) will do the same in the US.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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