Wider distribution lifting sales of Apple iPhones in Europe

Apple Online StoreiPhone “momentum is picking up in Europe as distribution widens,” Aude Lagorce reports for MarketWatch. “The end of exclusivity has already triggered a big leap in market share for the popular handset in France and observers say the phenomenon is about to repeat itself in the U.K.”

“In France, Apple’s iPhone was originally only available through France Telecom unit Orange, which bought exclusive rights to the device in 2007,” Lagorce reports. “But rival operators Bouygues Telecom and SFR, a unit of V, complained to the country’s competition regulator and were eventually allowed to distribute it as well.”

“Since April the iPhone has been available through the three main French operators. The widening of the distribution has boosted Apple’s value market share to 32% in the latest quarter from 21% just three months earlier, according to research from Bernstein,” Lagorce reports. “‘The expansion of iPhone distribution has clearly benefited Apple, helping it to more than double sales in three months,’ said Pierre Ferragu, analyst at Bernstein.”

Lagorce reports, “The gain happened mostly at the expense of Research in Motion’s BlackBerry, he said… France is now the biggest market for the iPhone in Europe.”

Full article here.


  1. This is a test market for Apple… based on the results in Europe, they’ll decide if it’s worth keeping ATT exclusive here in the USA. ATT is hoping it won’t make of a difference, else they’ll have to really pony up the subsidies to keep Apple exclusive!

  2. “The end of exclusivity has already triggered a big leap in market share for the popular handset in France and observers say the phenomenon is about to repeat itself in the U.K.”

    Next up: America! Starting June 2010.

  3. …”Next up: America! Starting June 2010.”

    Not likely. Apple will need to to four things:

    1. Build a CDMA phone (otherwise, the only other option in US is T-Mobile — a joke of a carrier);
    2. Significantly reduce manufacturing cost of that iPhone, and;
    3. Even more significantly lower their profit margins, and;
    4. Increase the retail price of the device

    With AT&T currently paying Apple $450 for every iPhone sold, the wholesale price of iPhone (for Apple) is around $650.

    All other carriers pay maximum of $250 as subsidy for smartphones (Storm, G1, MyPhone, Pre, Droid…). These subsidies are normally recovered within 18-20 months of that mandatory two-year contract. The $450 subsidy that AT&T pays cannot be recovered during those two years. However, AT&T can afford to pay much more, since vast majority of those iPhones will remain on AT&T after the contract expires (as there’s no other network for them to go in the US).

    However, should another carrier in the US get the iPhone, US consumers would immediately do what they normally do with othes phones: jump from carrier to carrier in search of a better deal and a free (or better) phone. If you went from AT&T to Verizon (and took your family plan with you), you’d be left with one or more useless iPhones. Those would end up on eBay, where majority would be unlocked (and many ending up in China, Russia or other gray market). No carrier can afford $450 subsidy without at least a 3-year lock-in.

    It is possible that the exclusivity agreement with AT&T is NOT five years (as has been widely reported), but only 3 years, which would expire next summer. Still, the only way I could see Apple bothering to go outside AT&T would be if AT&T (and other carriers, for that matter) were allowed to require 3-year agreements. For US, that would be a first.

  4. Let’s not forget; Apple can’t build them fast enough for the current demand through AT&T. It is not like they’re struggling to sell them in the US due to the exclusivity with AT&T. Apple has absolutely no need to expand to other carriers in the US yet. The market is still largest single market (by far), and any significant increase in supply would seriously undermine the marketing value of the current borderline-low supply levels.

  5. This make the Verizon ads kinda dumb for RIM if its simply about availability. Once Verizon has the iPhone it certain means the BB will take a hit and decline even further.

  6. …”Once Verizon has the iPhone…”

    Said like it’s a foregone conclusion, where in fact it is very unlikely proposition (see my long post above).

    However, that won’t prevent RIM’s share to take a hit and decline even further…

  7. @Predag – Nice analysis. I had not heard before the effect of having multiple carriers in the US that you describe. My guess is that most people will hold on to their phone to give to their kid or family member / friend as an iPod Touch. Sure a lot of iPhones will end up on eBay but I believe a significant portion will go end up as hand-me downs.


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