Despite what agencies might have been saying for the past couple of years, the penetration of iPhones in the UK is currently minimal. Despite the wealth of stories about the success of the iPhone app. store, the persistent celeb shots and the general hyperbole, the British public still haven't really taken to the iPhone as quickly as Apple would like. Although August's Admob report does report an increased penetration.
As with every market Tesco enters it's widely anticipated that the move will spark a price war that hasn't resulted since the announcements by Orange and Vodafone of their entry into the market. While the Orange deal was welcomed by the geeks for providing better 3G coverage, customer service and faster speeds - things O2 has been criticised for since their exclusive deal began - they didn't twin these advantages with competitve pricing.
Getting the iPhone onto Tesco shelves is the big prize and possibly hands the advantage back to O2, Tesco's operator partner. Tesco Mobile's customer base are already heavy data users so the market is primed to burst beyond the affluent middle classes, but to do that there must be a competitve pricing model. What the Tesco pricing model is will remain a question for the time being, but the iPhone could suddenly be this year's hottest present again.