With Apple announcing its entry into the European cell phone market on Tuesday on the back of O2, the United Kingdom has officially rejoiced at the possibility of having the iPhone that Americans have been coveting for so long.
But amid the excitement and hype, everyone seemed to gloss over one important fact from yesterday's announcement: Apple's iPhone business model is second to none, and Steve Jobs really is smarter than the rest of the world.
The new deal with O2 highlighted two interesting points: first off, O2, much like AT&T, is more than happy to share revenue with Apple. Secondly, it displayed the naivete of O2 to actually believe that Apple will stand by it through thick and thin. Hasn't O2 watched any of the iPhone-unlocking news hitting the wire in the past few weeks? Steve Jobs doesn't care about O2; he only cares about profits. And with this new deal, Great Britain may become the best profit center Apple has ever seen.
Consider first that all of the U.K. is covered by GSM carriers. Whether it's T-Mobile, O2 or Vodafone, anyone in the country can put any phone on any carrier at anytime. And while this may be troublesome for the carriers, it works quite well for the cell phone manufacturers and more importantly, for Apple.
As I've mentioned before, Apple is perfectly fine with people unlocking iPhones. And while I originally stated that the U.K. would be the breeding ground for iPhone unlocking, it will now become the spiritual headquarters of iPhone unlocking.
In the United States, GSM carriers are not the only option, and more often than not, people are willing to go with Verizon Wireless or Sprint Nextel, regardless of the inability to easily switch between the aforementioned companies.
But in the U.K., the economical landscape is much different. In fact, most Britons are more than happy to change carriers and are keenly aware of the terms "unlocking" and "SIM cards." In fact, many people in the U.K. have already purchased an iPhone in the States, brought it home, unlocked it and added it to their own carrier.
Steve Jobs knew that the U.K. is rife with unlocked phones and exclusively GSM coverage. And by looking like the best friend to O2, he's effectively pulling the same trick out of his bag: tell everyone they can only have an iPhone on one carrier, ignore unlocking, take the revenue from O2, and enjoy higher hardware sales due to simple unlocking procedures. Once completed, head to France and Germany, rinse and repeat.
It's amazing to me just how much control one device wields all over the world. Can you think of any other product that could command such respect from a massive cell phone carrier and create a whole new way of doing business in the cell phone industry? I certainly can't.
Once again, Steve Jobs has proven that he can outsmart CEOs. Only this time, he has done it in another country. In essence, Steve let the iPhone hype soar and allowed U.K. carriers to drool over the long lines and 1 million-units-sold mark. And once they took the bait, Jobs had them right where he wanted them. From there, he walked in with his AT&T contract in hand and walked out laughing.
Steve Jobs has once again proven why he is the most competent CEO in the world. But more than anything else, we've learned that a sucker is born every day. Only this time, its name isn't AT&T-- it's O2.