O2 getting ready for next generation of iPhone

5 Apr 2009

O2 is understood to be battling hard to clear stocks of existing iPhones – even offering them for free – in preparation for a whole new generation of iPhones on the way from Apple.

O2’s UK operation has been spending a large chunk of its advertising budget, as well as its own cash, offering free 3G iPhones to encourage consumers to snap up all remaining iPhones in stock.

According to a report on The Guardian website this morning, existing contract customers are being offered the iPhone and the opportunity to roll over their contracts for a further 18 months.

The report surmised that O2 is coming to the end of its existing exclusive contract with Apple.

The next version of the iPhone is due to be revealed on 8 June at the Apple Worldwide Developers Conference in San Francisco.

The next generation of devices is expected to arrive with a video camera, more memory and improved wireless networking abilities.

The big question is whether Apple will continue its exclusive multi-year arrangement with O2, and if the operator will once again be granted the franchise for the introduction of the ground-breaking smart phone.

It is understood that the original contract came with a two-year break clause. In the US, AT&T’s arrangement with O2 ended last week, and rival operators are eyeing the franchise hungrily.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years