Tesco Undercuts Rivals in iPhone Deal

As expected, the announcement that one of the most powerful retailers on the planet is due to begin selling the iPhone has sent the industry aflutter on the other side of the Atlantic. UK supermarket Tesco recently revealed when and for how much it well sell units for.

The good news is that sales kick off today, and that Tesco’s deals easily undercut those already on the market. Of note, its £20 a month (roughly $33) 12-month contract comes in a fair whack below the cheapest iPhone contract currently available in the UK, offered by Orange for just under £30 (around $48). However, it does come with a price tag of £222 (around $360) for the unit itself on sale. But Tesco is the first network to offer the phone on a year-long contract, as all previous contracts from rival networks last 18 months or longer.

Tesco will also be selling iPhones on “pay as you go” deals, the cheapest package being an 8GB unit available for £342 (around $555). This gives consumers a range of options that are certainly more palatable to those with tighter wallets, but perhaps not the earth-shakingly cheap deals some were expecting from the likes of Tesco, a chain famous for its cheap prices across all departments, including electronics.

Still, analysts are betting that Tesco will steal a fair chunk of market share over the festive season, causing the likes of Orange and long-time iPhone retailer O2 (whose contracts remain some of the most expensive on the market) to react by shaving the pounds’“- and months– off their own deals.

Whether such forecasts will come to pass remains to be seen, but it’s clear the iPhone is reaching mainstream maturity in Europe, and leagues of consumers are heading straight for the App Store as a result. It’s a good time to be an iPhone developer, isn’t it?