Apple to team with O2 to sell iPhone in Britain

Apple Inc. said Tuesday that it would sell the iPhone in Britain with mobile-service provider O2, the first step by Apple Chief Executive Steve Jobs to capture a share of the wireless-phone market outside the U.S.

The 8-gigabyte handset will go on sale in Britain on Nov. 9 for 269 pounds ($536), Jobs said in London. O2 is owned by Madrid-based Telefonica, Europe’s second-largest telephone company.

Jobs slashed the iPhone’s price in the U.S. by $200 this month, or about a third, to spur holiday purchases. Teaming with O2, the largest mobile operator in Britain, allows him to reach almost a third of the population in that region, the second-biggest market for mobile phones in Europe.

“For the iPhone to be a success, it needs to be a hit in Europe,” said Gene Munster, an analyst with Piper Jaffray & Co. in Minneapolis. “The good news is Europeans are willing to spend money on phones.” He estimates that half of iPhones will be sold outside the U.S. in 2009.

Carphone Warehouse, the region’s biggest handset retailer, will sell the phone in partnership with O2, the companies said.

Shares of Cupertino, Calif.-based Apple climbed $2.51 to $140.92.

Jobs said the companies wouldn’t disclose the financial terms of the multiyear deal.