Apple

Vodafone will begin selling the iPhone in the U.K. early next year, the operator said Tuesday.

The news follows Orange's announcement Monday that it will start selling the iPhone. Unlike Vodafone, however, Orange will begin stocking the iPhone before year's end.

The announcements mark the end of O2's two-year exclusivity on Apple's popular handset.

Vodafone Group already sells the iPhone through 13 of its operators around the world, while Orange stocks the handset in 28 countries and territories. Neither Vodafone nor Orange has announced details of their iPhone pricing plans for the U.K. market.

Among the other U.K. operators, T-Mobile has said it has no plans to offer the iPhone, and 3 has not indicated its intentions regarding the handset.

David Meyer of ZDNet UK reported from London.

Like it does in most countries, Apple has a preferred wireless carrier in the United Kingdom. In this case the carrier is O2, but that may not be the case for long, at least for the iPhone 3G.

(Credit: Apple)

According to a report on Mobile Today, Apple may open up iPhone 3G sales to other wireless carriers in the U.K., namely O2 competitors Orange and T-Mobile. O2's exclusive with Apple reportedly ends in September, giving Apple a couple of months to set up other deals.

T-Mobile is so sure that they will get the contract for the iPhone 3G that its call center employees have already begun telling customers that it may have the iPhone in the future, according to Mobile Today

If Apple were to open up the iPhone to other carriers it could increase sales of the older model phones, while continuing sales of the new iPhone 3GS with O2.

Many people in the U.S. are hoping Apple will do the same thing here. Rumors of talks between Apple and wireless carrier Verizon have been floating around for months, but so far nothing official has happened.

Verizon's work on its 4G network, which is based on the GSM standard, have kept the rumors alive. AT&T is said to be negotiating with Apple to keep its exclusivity deal.

Updated at 12:00pm to clarify the French law on unlocked cell phones, and at 1:43pm with comment from Apple.

The iPhone on Friday will make its debut in the United Kingdom and Germany, the first countries outside of the United States to get their hands on Apple's first mobile phone.

Apple's Steve Jobs introduces the iPhone to the British in September.

(Credit: Crave UK)

For months, many (including this guy) had expected Apple to wade into the European mobile-phone market with a 3G iPhone, but virtually the same model that's available in the States will be presented to British and German users of O2 and T-Mobile's networks, respectively. The 8GB iPhone is going to cost 269 pounds in the U.K.($563.87 as of this writing) and 399 euros ($583.84), including VAT in both countries.

It will be very interesting to see how the iPhone is received in Europe. Sophisticated smartphones and fast 3G networks are the norm in many places, not a novelty. Still, the combination of the touch-screen interface and the iPod capabilities should tempt some European consumers; at the Intel Developer Forum in September, I noticed more than one member of the British press sneaking over to the San Francisco Apple store to acquire an iPhone, presumably with plans to unlock it for the carrier of their choice.

According to reports, there will be at least one significant change arriving with the European iPhones: OS X 1.1.2. UPDATED: Apple confirmed Thursday afternoon that OS X 1.1.2 will ship tomorrow "to support the international launch of the iPhone."

The software update, which will presumably be delivered to all iPhone owners, is said to fix the TIFF image flaw that allowed the iPhone to be rehacked after the 1.1.1 update disabled third-party applications. It will also probably escalate the hacking wars by making the iPhone more impervious to both third-party applications and unlocking, the real source of consternation for Apple.

Later this month, France will be the third European destination for the iPhone, and Apple and Orange, the wireless carrier selected for France, might have to make a concession to the forces of unlocking. Apparently, it's against French law to sell mobile phones locked to a specific network, though Apple has not confirmed whether its French iPhone will be locked.

UPDATED: At the suggestion of a reader, I looked into this a little more, and it's not explicitly against the law to sell locked phones. However, the law requires that French carriers unlock phones if the customer requests it, and they have to let customers do that for free after six months.

Apple announced its first iPhone deal outside of the U.S. this morning, and might have made its second big mistake in the early days of its iPhone strategy.

The company announced an iPhone partnership Tuesday morning in London with U.K. carrier O2. CEO Steve Jobs made an appearance at the Regent Street Apple store to answer questions from the British press, who were curious as to why Apple decided to introduce the same EDGE phone that's on sale in the U.S. to the U.K. market.

Engadget's live blog reported that Jobs is still concerned about battery life. "The 3G chipsets are real power hogs," Jobs said, adding that he doesn't think 3G chipsets will allow for sufficient battery life until next year. That was the same answer Apple gave earlier this year to questions about the first U.S. iPhone and its dependence on an EDGE cellular network outside of Wi-Fi hotspots.

The two markets are very different, however. The U.K., and really Europe as a whole, are much further along in their deployment of faster 3G cellular networking technology than the U.S. O2 CEO Matthew Key said Tuesday that only about 30 percent of its network will be EDGE-compatible when its iPhone launches, but the carrier has already deployed 3G in many places throughout the U.K. EDGE was meant as a stepping stone for some carriers who weren't ready to roll out full 3G services, but most U.K. carriers went ahead with 3G implementations to replace their older 2G GSM/GPRS networks. (Check out GSMWorld.com if you need help deciphering the alphabet soup that is the cellular industry.)

Apple CEO Steve Jobs unveils the company's U.K. iPhone deal with O2.

(Credit: Crave UK)

It's a little different back in the U.S., where 3G technologies compatible with the base GSM standard used by the iPhone are just getting under way, and EDGE was used to keep people interested during the interim. AT&T, the U.S. iPhone carrier, only offers 3G services in select cities around the country, while the U.K. carriers have a more seamless deployment of 3G technology.

Therefore, Apple's going to have to really captivate U.K. buyers with the design and interface of the iPhone. That's been the device's strong suit since the day Jobs first held it aloft at Macworld, but lots of U.S. iPhone customers had never experienced 3G networking speeds before, and therefore didn't know what they were missing. Most tech-savvy Brits interested in smart phones likely already have a 3G phone, and asking them to step back to EDGE might be a tall order.

Jobs' insistence on a high standard for battery life may pay off in the end, but it could be a tougher go for Apple in the U.K. at first. Apple and O2 are throwing in a subscription to The Cloud's U.K. network of hotspots, since O2 has limited EDGE coverage at launch.

But coming off Apple's miscalculation on the iPhone price cut backlash, you have to wonder if the company is likewise misreading the appeal of the iPhone in the U.K. Sure, it's pretty, but is it too slow? As always, people will vote with their wallets.