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On Friday we saw Vodafone release its first quarter figures and as expected the UK arm of the company isn’t performing well with revenue has falling 4.7% year on year.  It seems that Vodafone cant make a statement nowadays without commenting on the Iphone quietly blaming it for the fact that O2 are out performing the once market leader.

Whose fault is it that Vodafone do not have the Iphone in the UK? Vodafone’s that’s who. The company was too complacent, and too wrapped up in its own hype that it decided not to meet the demands made by Apple instead settling for exclusivity in other OpCo’s.

Is Vodafone winning in the markets it has exclusivity on the Iphone? Not as well as O2 are in the UK.

So given those two points Vodafone needs to do more than just secure the Iphone to for its UK customers. Im sure the Iphone would help but unless it’s an exclusive deal then it’s unlikely to change the company’s position in the UK.

TechCrunch are reporting that come September, the 3G Iphone will be available from T-Mobile, Orange and Vodafone but not the 3GS that will still be exclusive to Apple themselves, O2 and the Carphone Warehouse.

This is a great move by Apple as they get more sales channels for an outdated Iphone 3G handset.

It suits O2 as they get to keep the exclusivity for the 3GS.

Its a strange move by Orange, T-Mobile and Vodafone. None of these three were happy to jump through the hoops well enough for Apple to give them the exclusive deal which O2 eventually won. But now, Orange, Vodafone and T-Mobile are happy to but in return they get an albeit good, but seriously outdated handset.

Why would a customer purcahse a phone that has already been superceded, tieing themselves down for 18 to 24months in the process. Does anyone love their network that much? Nowadays thats not the case. People are more driven by handset rather than the network.

We will have to wait and see what actually happens.

Now before I get into this post let me make something clear, my maths is rubbish. I have on a few occasions put 2 and 2 together and got 5. Im hoping that this isnt one of those cases.

It has been widely reported that Orange and T-Mobile are set to get their hands on the older versions of the iphone this September. What strikes me as odd is that Vodafone’s name has not been mentioned anywhere. Can we read anything into this? Are Vodafone uninterested in the 3G Iphones because they have the next gen phone lined up already?

Big product launches are epxected later in the year around Vodafones Now+ / mobile internet offerings. Could the Iphone be one of them? Fingers crossed.

Mobile operators face a number of significant challenges in launching their own application / content stores:

Late to the table

Apple are streaks ahead of anyone else, Rim and Nokia are struggling to catch up so Mobile Operators have a big task on their hands and if they leave it too late their offerings may be more of a token gesture than a the revenue stream they hope for.

Multi Platform

Apple app developers build apps for a single handset and only one OS, OSx, Nokia developers for build for multiple handsets but all have the same operating system, Rim app developers build for multiple handsets but all with the same locked down OS. Spot the theme? Operators however sell a whole range of phones with many different operating systems. Some claim to have come up with a way around the challenge but it will be very difficult to provide a stable, locked down environment that developers have confidence in that enables them to develop them to build apps for all platforms.

Manufacturer Vs Operator

When Apple were in negotiations with mobile operators regarding who will sell their flagship handset the fruity company were rumoured to have made a significant number of demands including what could and couldnt be put on the phone in terms of branding. Im sure if a mobile operator said it wanted to put its own application store client on the handset Apple and most likely other manufacturers would put their foot down. Three key manufacturers have their own app stores, Nokia, Rim (Blackberry) and of course Apple which could heavily restrict what phones mobile operators could install their app stores on. Why would manufacturers open the door for the operators? It’s just not going to happen.

If the operators over come the challenges mentioned above, they have some key advantages over the manufacturers such as customer numbers, a billing relationship with customers amongst others.

Given the cost of rolling out fast (2mbps) broadband to all including those in rural areas the Digital Britain Report (DBR) recommends that there should be a monthly levy on everyone with a landline, of 50p to go some way towards paying for it. Ok so that’s only £6 a year but I dont see the Government offering assistance to mobile networks to ensure the country has total 3G coverage instead they raised £20bn from the sale of licenses and the regulators are constantly looking for ways to take money off the mobile operators. Anyone would think BT is still nationalised.

Its been widely reported that due to an internal uprising of unhappy employees the Vodafone UK board have reversed their decision not to give staff a bonus this year. What a load of bollocks!!. Such a statement implies that the board of one of the biggest companies in the UK is so weak that it can be forced to change its mind on something by its staff.

The reports also seriously patronise staff. Although none of us were happy with the fact we werent getting bonuses we understood why. The company hadnt performed. There has been no hint of fury or uprising so I would like the sensationalist journalists to put a little bit of work into their next pieces on Vodafone rather than writing lazy articles.

In truth, the board realised all the hard work that UK employees put in which unfortunately wasnt mirrored by the financial results. Acknowledging the amount of change required and that much has been done to turn this oil tanker round the board made the decision to reward staff. I can tell you that it came out of the blue and went down very well indeed. Shame the papers got hold of the internal communications but still I for one believe in the board we have.

Here is the link to the Vodafone site explaining how to upgrade your Blackberry Storm Firmware to version v4.7.0.141.

Vodafone Website – Upgrade your Firmware

 This latest software update delivers a number of improvements to the multimedia performance, messaging and the touch screen display, Bluetooth and browser.

The battle over the next round of smart phones is set to step up a notch or two next month with a number of key announcements expected at the Apple Developers Conference and the Open Mobile Summit.

Here are a few stories doing the rounds:

O2 get exclusivity on the Palm Pre

http://www.guardian.co.uk/business/2009/may/24/02-iphone-palm-pre

• The Guardian reported that O2 have captured exclusive rights to the Palm Pre in the UK. A major boost if the reports are true as the Pre is well hyped and already has a big following.

O2 Iphone exclusivity expires in the UK?

• O2’s capture of the Palm Pre may be at the expense of the exclusivity they hold on the Iphone.
• Apple are looking to boost the revenues they receive by network operators and so may be looking to expand their market in the UK.

New Iphone to be announced next month?

• A new handset could be announced possibly as soon as the Apple Developers conference next month

Blackberry storm 2 confirmed.

• RIM have confirmed that a Blackberry Storm 2 is imminent with the new handset having the much missed WiFi capability and improved touch screen possibly doing away with the Truepress screen that has seen Marmite like feedback

Nokia still the biggest but starting to be forgotten.

• The N97 is out next month in the UK with a number of Operators offering the phone.
• Nokia is still the largest smart phone provider but it has seen its market share fall considerably and is keen to put itself back on the map.

More Android Phone Coming

• HTC, Samsung, LG & Sony Ericsson are amongst the suppliers that will be releasing Android phone this year.
• Given that its rumoured that the network carriers share in the revenues from Google’s application store Android based phones will be heavily pushed.

Due an upgrade in a coupe of months time, I for one will be keeping a close eye on announcements and releases.

There are a number of app stores out there, Apple, Palm, Blackberry, Windows and Google all have app stores but there is one key difference with the Android Market the revenue share model. All the other app stores give a proportion of the revenue to the developer 70% to 80% with the remainder being passed to the app store owner. Google however has waived its revenue and instead that the 20% to 30% goes to the mobile operator providing them with a way to make money from not doing anything at all.

Someone I know tried to pre-order a HTC Magic G2 phone today as it is available for pre-order on the Vodafone website. As a Vodafone customer they thought this would be straight forward and were really looking forward to getting their hands on a phone that should have been out a few weeks ago. Not so, although the phone is available to pre-order on the vodafone.co.uk website unfortunately that’s only for new customers. Existing customers will only be able to order the phone after May 5th when Vodafone has the phone in stock and knows what its going to charge for it.

A little surprising given that Vodafone have decided which tier the phone will be in and even when the customer threatened to go to O2 and get an iphone, the customer care agent still couldnt do anything for the customer. How frustrating.

If Vodafone are planning on putting new customers first for all new handset releases as they did with the Blackberry Storm and as it sounds like they are doing with the HTC Magic then the company is neglecting the cheaper customer and risks increased churn levels. New customers are expensive to acquire and are very much an unknown entity where as Telco’s have a far greater insight into existing customers spend patterns. In this example the customer is chasing the operator asking to be signed up for another 18month plan on a more expensive monthly tariff.