Tesco Picks Up iPhone And Hints At Price Cuts

Tesco Mobile, the mobile phone arm of the giant supermarket, is to stock the iPhone soon, on pay-as-you-go and monthly contracts.

Given Tesco’s price-cutting reputation, the announcement has sparked hopes of a price war that would bring down the price of iPhones in the UK before Christmas. “We would love to get it in our stores before Christmas and would love to bring a bit of Tesco value to the iPhone and offer something very different to what is out there,” a Tesco spokeswoman told the Times.

However, Tesco Mobile is a joint venture with O2, and the handsets are coming through that channel, which must limit any leeway for price cuts.

Analyst Canalys has predicted iPhone price cuts in 2010, as it faces competition from Android handsets such as the Motorola Droid. The Android operating system is free and open source, so it can be put into cheaper devices, but operators and handset makers are not anxious to sell phones cheaper, but intend to continue developing specialist hardware and services to maintain margins.

Orange became the first operator outside of O2 to offer the iPhone in the UK earlier this month and disappointed any customers hoping it would start a price war for the device. Vodafone is also planning to offer iPhones in 2010.

Mobile operator 3 remains possibly the UK’s best hope for cut-price iPhones, as it aims the mass market and has expressed hopes of selling iPhones in 2010.

Potential iPhone users should be wary that the device is now a target for hackers with the arrival of a malicious worm targetting phones that have been “jailbroken”.