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Apple ready to unlock 3G iPhone
By Mark Kleinman and Dominic White
Last Updated: 12:27am BST 08/06/2008

The next stage of the global mobile phone revolution is about to arrive on British shores, and for some consumers, the experience will be heavily subsidised.



Steve Jobs is expected to unveil the 3G iPhone in California tomorrow

The Sunday Telegraph has learned 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.

Steve Jobs, the boss of Apple, is expected to unveil the 3G iPhone in California tomorrow, signalling a radical change in the distribution model for the world's most sought-after mass-market mobile phone.

As part of the shake-up, which is designed to help Apple shift 10m iPhone handsets globally this year, O2 is expected to offer the first pay-as-you-go version of the iPhone, and to force contract customers to sign up to the network before leaving stores with the phone.

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The 3G version of the phone, which has been shrouded in typical Apple secrecy, will offer faster surfing speeds and a GPS connection, and is likely to be offered free only to customers on the most expensive 18-month tariffs.

However, to date Apple has sold just 5.4m iPhones, a tiny fraction of the 1.2bn global mobile phone market that is dominated by manufacturers such as Nokia, which alone sold 437m phones last year.

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In a bid to take the phone to the mass market, Apple chief executive Steve Jobs has dropped his resistance to the sales techniques that have made the mobile phone the best-selling consumer electronics device of all time.

In return for allowing networks to subsidise the iPhone, it is thought that Apple will take a higher proportion of the ongoing revenues from customer usage of the phones.

Apple also wants to prevent contract customers "unlocking" the iPhone for a small fee at specialist mobile phone shops and inserting the SIM card from their existing provider into the handset.

Analysts estimate that as many as 30 per cent of iPhone users have used this technique, which has denied Apple and O2 any of the ongoing usage revenue.

Apple and O2 both declined to comment.