Apples over Europe: As expected, iPhone for Germans

Apple Inc. continued its weeklong roll through Europe today as Deutsche Telekom AG’s wireless subsidiary T-Mobile in Germany announced that the iPhone will launch Nov. 9 at $566.
The companies offered no word on monthly service costs, or on the length of an expected service contract. Nor did the companies discuss T-Mobile’s expected iPhone-related data revenue-sharing with Apple.
The announcement followed yesterday’s iPhone splash in London; O2 will offer the handset in the United Kingdom, releasing it on Nov. 9 as well. A similar announcement is expected later this week from Apple and a French partner, which is rumored to be France Telecom’s Orange.
Pete Cunningham, analyst at London-based Canalys, said today that most observers expect that Apple will receive a share of its operator-partners’ iPhone-related data revenue, because the operators are not subsidizing the handset.
As with AT&T Mobility’s Apple deal in the United States, the implications of operators’ revenue-sharing have been a major component of the wireless industry’s conversation over the Apple deals.
“That’s the first time revenue-sharing has taken place in the consumer mobile space in Europe,” Cunningham said. “It’s possible that, in the future, handset vendors may choose subsidies or revenue-sharing in their agreements with operators.”
The top European operators would like to move away from handset subsidies, Cunningham said, but whichever makes the first move could be battered by competitors as a result. Thus the analyst expected no quick changes as a result of the unsubsidized iPhone launch.
But Cunningham praised the iPhone as “a step forward” that represented “a rude awakening” for incumbent vendors.
“It’s fantastic for the industry-though not for other vendors, which must now compete,” Cunningham said.
The analyst predicted that Sony Ericsson Mobile Communications, in partnership with European giant Vodafone Group plc would bring a product to market soon to compete with the iPhone.
Cunningham also forecast that Apple’s iPod Touch device, priced on par with the iPhone, would “cannibalize” iPhone sales because it doesn’t require a contract or monthly service fee. He added that at yesterday’s event, O2’s U.K. chief executive, Matthew Keys, gave the appearance that he was not aware of the impending launch of the iPod Touch when he cut his deal with Apple for the iPhone.
If the France Telecom deal goes through as expected, Apple will have secured deals with the top operators in the U.K., Germany and France, serving nearly 18 million, 34 million and 23 million subscribers, respectively, according to Canalys data.