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Vodafone to become third iPhone seller in UK

A day after Orange announced plans to start selling the Apple iPhone 3G and 3GS in the UK later this year, Vodafone has revealed that it too will be stocking the smartphone from early 2010.

Representatives for the mobile network say they will be targeting existing customers with the device, in contrast to the O2 model of using the smartphone to attract new shoppers.

Observers have pointed to a possible iPhone price war as a result of the development, with some suggesting handsets could drop in value by more than £100.

"Research shows that in every country where there is more than one operator selling it, it is cheaper," Ovum technology analyst Steven Hartley confirms to the Telegraph.

"It could be very disruptive, but it depends how Orange play it. If they get really aggressive O2 will have to respond and a full-on price war could start."

Although Orange has not provided details of its contract terms, it has indicated that they will be more favourable than those of rival O2.

If the iPhone's contract tariff were reduced by £5 a month, up to £120 could be cut from the price of the smartphone on a 24-month agreement.