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Apple vs Nokia: the smartphone battle

By Benjamin Cohen

Updated on 19 June 2009

Nokia's newest gadget, the "iPhone killer", goes on sale the same day as Apple launch the iPhone 3GS. Benjamin Cohen asks whether the new phones are worth the hype.

Apple iPhone (Getty)

Apple have turned iPhone launches into an art. Since 2007, once a year, I have dutifully trudged down to an Apple store to stand outside as a load of Apple devotees rush in to be the first to have the hallowed phone in their hands.

During the launch of the first iPhone, I got thrown out of the Apple store for repeatedly asking the company's Senior Vice President, Phil Schiller about why iTunes (which is a key component on the phone) charged British customers more than Americans and those in the Euro. The clip has been viewed more than 100,000 times on YouTube and made me a star in the tech scene for about ten minutes.

Last year, we covered the launch of the iPhone 3G that much improved upon the first version. Back then some were angry that then new version came out just months after the first, especially given that many customers were locked into lengthy 18 to 24 month contracts.

This year was a much more low key affair. Some of the Apple fanatics turned up but in truth there were probably more journalists, public relations people, Apple staff and the odd protestor than there were actual contracts. Perhaps it is because many customers are still part way through hefty 24 month contracts.

That's because exactly a year after the last release comes the iPhone 3GS. This time Apple have added the rather basic function of copy and paste (not sure why this wasn't in earlier phones), a video camera and assisted GPS. It is also much faster to use and has larger storage capacity than the previous release.

The success of the iPhone has in part been due to the iPhone Apps that for a nominal fee allow you to add useful add-ons to the phone.

They ain't cheap. You can only use the iPhone on the O2 network.

If you wish to purchase the iPhone 3GS with the largest memory – 32GB and don't want to pay anything upfront you’ll need to signup to a 24 month contract of £73.41 a month or a total price of £1,761.84. You will get an astronomical 3,000 minutes a month, but given the ability to use internet based phone services I’m not sure why you would need that many. It is more than £800 more expensive than a similar contract for rival Nokia's N97 phone which is also out today.

It is much cheaper to buy the iPhone for £274.23 and chose an 18 month contract of £34.26 a month, the total is £890.91.

But there will be complaints from some customers who are still stuck in contracts for the iPhone 3G. They will have to continue to pay for them even if they wish to purchase the newer model. There are exceptions, if you spend more than £35 per month every month, you can upgrade a month early; spend more than £80 extra a month you can upgrade six months early.

Carphone Warehouse, the only place other than Apple Stores and O2 shops where you can purchase the phone will offer customers refunds on their iPhone 3Gs. If you purchased a 16 GB model, they’ll give you back £180, but you will still be forced to pay for two mobile phone contracts at the same time.

But the high charges don’t just end with the contacts. A new function called "tethering" allows you to plug the iPhone into your laptop and use it as a mobile broadband dongle. O2 are charging £14.68 a month for this with a 3GB a month allowance. But, the iPhone does come with "unlimited" data usage and there is a hack being circulated around the internet allowing you to tap into this rather than having to pay a further £176.16 a year to O2 for this functionality. Although, O2 have said that if users are caught doing this they will be charged the full cost or disconnected.

The phone comes out on the day that Nokia debut its "iPhone killer", the N97, more about that later.

Benjamin Cohen reviews the N97 here.

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