Apple 2.0

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iPhone finally reaches 1 million mark in U.K.

February 27, 2009: 9:36 AM ET

iPhone O2 original adIt took 16 months, but O2 UK, Telefonica's (TEF) British subsidiary, managed to sell its 1 millionth Apple (AAPL) iPhone before its parent company released its 2008 earnings report Thursday.

But as several news sources (here, here) were quick to point out, Nokia (NOK) a year earlier managed to reach the same milestone in less than half the time, selling 1 million N95 smartphones in the U.K. in just seven months. (link)

"iPhone sales are continuing to accelerate," said Matthew Key, CEO of O2 UK. Despite the dismal economic climate, the division's annual sales were up 10.6% in 2008, thanks in large part, said Key, "[to] the success of our products at the top end of the market, including BlackBerry and iPhone." (link)

Telefonica's worldwide sales were up 6.9% for the year, led by growth in its Latin American (12.9%) and European (5.9%) divisions.

Although it has been since eclipsed -- at least in the eyes of the British press -- by the iPhone and its imitators, the N95 was considered a breakthrough smartphone when it was released in March 2007 to rave reviews. The Register named it one of the top products of the year. ("It's the Swiss Army Knife of mobile phones: a compact handset that does everything.") (link)

The N95's suggested retail price at launch was 549 pounds ($780), but by the time the iPhone arrived in November 2007, the Nokia was being heavily discounted. It's now bundled into a wide range of service contracts that throw in the device for free.

The iPhone is also available for free in the U.K. with a monthly 45-pound ($64) tariff. See here for O2's current rate plans.

By the end of 2008, Apple had sold 17.38 million iPhones worldwide.

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Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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