O2 turns down Nokia's flagship N96

Perhaps the most anticipated cellphone launch of the year has failed to attract O2's attention. The company has decided the Nokia N96 will not be sold from its retail outlets, even though Nokia has dragged forward the release date of the N96 by one month in an attempt to disrupt the success of the 3G iPhone.

The reason, apparently, is that O2 has already allocated the bulk of its subsidy budget for this year to the 3G iPhone. The company is said to want to reduce the spiralling costs associated with subsidising handsets, especially high-end devices like the N96 which has a retail price of around €500.

O2 is also concerned on two other fronts -- will the highly-complex N96 be bug free given Nokia's rush to market? Early N95's were plagued with software and component issues that are a nightmare for operators. And, perhaps more importantly, O2 is under growing pressure to achieve its iPhone targets for this year, or risk losing it exclusivity contract with Apple.

Separately, although conspiracy advocates will have otherwise, O2 has also announced it will scrap the role of head of brand innovation.

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