3 is to sell its MiFi Wi-Fi mobile hotspot gizmo bundled with an iPod touch, to let you Skype your mates wherever you are. Is this the cheapest “iPhone” ever?

A bunch of new iPhone vendors have popped out into the open recently, including Orange, Vodafone, and even Tesco, so Three’s obviously keen to get in on the action. It’s not selling the iPhone, but the next best thing: an iPod touch bundled with MiFi mobile Wi-Fi so you can get online with it wherever there’s 3G and dial your friends over Skype.

Naturally there are some downsides to this mashup: the MiFi needs to be charged, you get no GPS, and it’s only the 8GB iPod touch, not the 64GB. But hey, if you’re planning on getting MiFi anyway (and you should be), think of it as a free iPod touch instead.

Tesco have been confirmed as the next company in Apple’s move to open up its UK distribution channel by giving them the right to sell the Apple iPhone, and have it ready in the Tesco Mobile shops, which are in association with O2, before the Christmas rush in December.

This will shock Vodafone and Orange, who have also secured a deal with Apple at prices similar to O2’s, and possibly start a ‘price war’ between the two companies with the Christmas retail race already under way.

With Tesco now worming its way into the UK mobile phone market, we could potentially see a number of different tariffs available for the iPhone, having to choose from none other than 4 different deals from 4 different companies. That is all depending on if they all choose 1 tariff per phone, which is doubtful.

Tesco is also hoping to double the number of Tesco Mobile outlets by the end of 2010 to 200 stores, which is another indiction of the share of the market that Tesco want to dominate.

O2 originally had the iPhone 3G as a time exclusive device for quite some time. “Quite” is an understatement for two whole years.

With Orange UK recently releasing the iPhone and Vodafone announcing that they too will be having the device on January of 2010, O2 has just not lost exclusivity, but also price control. Just a week prior to the Orange launch of the iPhone, O2 started coming up with new promotions for the device. Competition can truly be a good thing.

Tesco will be boosting O2’s market share on the iPhone as they too have announced that the Apple iPhone will be available through them as well. Interested buyers may sign up at the pre-registration page at the Tesco website though there are still no details regarding the specific release date.

The official press release from Tesco dated November 25 states that the Tesco will be releasing Apple iPhone products “through its joint venture partnership with O2”. Specific details regarding this are still unavailable, but it is confirmed that all iPhones to be sold by Tesco will be under an O2 pay-as-you-go or monthly tariff plan.

The bunfight for iPhone crumbs in the UK continues with the announcement that Tesco Mobile, the queen of the reasonably-priced pay-as-you-go mobile market, will ‘shortly’ be selling Apple’s golden egg.

The supermarket giant will join the original Miss iPhone UK, O2, which held the exclusive rights for the past two years; first runner-up Orange which started selling the iphone this month; and second runner-up Vodafone, which will have to wait in the wings until after Christmas to get its telecom tiara.

All this new iPhone competition might suggest the UK consumer will be quids in as a price war erupts, and certainly Tesco’s reputation for value would lend this some credence. But the evidence is not encouraging.

Apple keeps a tight reign on its retail price. So the price tag for off-the-shelf phones without a contract is likely to remain high (£538.30 from O2 or £549 from Orange for the 32GB 3GS ). And because the telecom operators have to absorb whatever subsidy they offer on the phone, the contract prices leave little room for manoeuvre.

In a blow to rivals Orange and Vodafone, British supermarket giant Tesco has snagged a deal to sell the iPhone before Christmas in partnership with carrier O2

Tesco (TSCO.L) is turning the screw on rival mobile phone shops by offering the Apple (AAPL) iPhone in its stores and online over the coming weeks. The supermarket's telecoms division, Tesco Mobile, said yesterday that it would introduce the iPhone 3G and the latest 3GS model in the UK before Christmas as part of its joint venture with the network provider O2 (TEF).

Tesco is the fourth company to sign a deal to sell iPhones in Britain following O2 and Orange (FTE), which already sell the iconic handset. Vodafone (VOD) has plans to offer the device from the new year but has yet to agree a date.

A spokeswoman for Tesco Mobile said: "It is a coup for us. Our absolute aim is to get this into stores and online before Christmas."

Although a launch date has not been confirmed, Tesco Mobile's iPhones will be offered on contract and pay-as-you-go deals.

Apple's mobile internet-based handset, the iPhone, could become the subject of a price war after Tesco Mobile announced it will carry the device.

This is the view of Fraser MacDonald, editor at Stuff Magazine, who noted the virtual network could convince other carriers to look to undercut each other on the cost of the high-end mobile internet device.

However, he also pointed out the effect of Tesco's iPhone release is difficult to judge as it has yet to announce any details of price plans for the smartphone.

Mr MacDonald added any potential battle would depend on whether Tesco sells the handset on behalf of the networks or if it allows a sim-free version to be purchased.

It would open the iPhone up to a wider audience if a price war does commence, he stated, adding: "There are a lot of people out there who can't afford one who would like to get their hands on one."

Tesco revealed on Tuesday (November 24th 2009) it would be releasing the handset in its Phone Shops and via its website.

What effect will Tesco's iPhone launch have on the market?