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iPhone shake-up

• Rory Cellan-Jones
• 30 Jan 08, 16:55 GMT

I'm up a mountain in Austria on holiday but even here - via my tiny hotel's very efficient wi-fi - news arrives of a .

And for all the protestations from O2 that this is the bestselling handset ever, one can't see the new tariff as anything more than confirmation that sales have really tailed off since that early rush last November.

Neither O2 nor Carphone Warehouse have released any sales figures but anecdotal evidence suggests that canny British customers - used to getting a free handset and oodles of calls and texts for an 18-month £35 a month contract - have baulked at the idea of paying £269 for an iPhone and then £35 a month for a rather meagre number of calls.

Apple's entry into the mobile phone market has been a spectacular success when it comes to devising a handset that suddenly makes the mobile internet a pleasure rather than a chore. But the firm is finding that in this global business there are plenty of local peculiarities - and in Britain at least you’ll struggle to persuade customers that a phone doesn't come free with a contract.

One thing that O2 hasn't changed is the £7 a megabyte tariff for data abroad - though the firm tells me there will be a 40% cut in the summer. And that is why I'm using wi-fi rather than Austria's mobile network to send this blog.

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