Apple’s iPhone, the year’s most hyped gadget, arrived in Britain yesterday with a starting price tag of £899.

The basic handset will cost £269 – £69 more than in the US. But Britons must also sign up to a contract costing £35 to £55 a month with O2 , Apple’s chosen network partner, for a minimum of 18 months. That puts the cost of the handset and contract at between £899 and £1,259 over 18 months.

The gadget – a mobile phone, iPod music player and internet surfer – will be available only on the O2 network. However, several websites claim that they can unlock the device so that it will work on rival networks. It will go on sale on November 9 and be available in Carphone Warehouse stores, O2 shops and Apple outlets.

Some analysts questioned whether the gadget was too expensive to have mass-market appeal. In Britain, one of the world’s most competitive mobile phone markets, most handsets are included in the price of a contract.

Read full story.