France may not see iPhone this year - report

[AppleInsider]

Orange, the wireless arm of France Telecom, is reportedly contemplating the prospect of not being able to launch Apple Inc.'s iPhone handset in time for the holiday amid growing tensions between the two companies.

"The risk we're evaluating this week is that Apple crosses France off," Les Echos quoted a source at Orange as saying in its Friday edition.

The French daily said the difficulties stem from a French law that would require the Apple handset to be sold both with and without contracts. This law would reportedly undermine the iPhone's exclusivity for Orange and Apple's demand of up to 30 percent of voice and data revenues.

A spokesperson for France Telecom went on record last month in claiming that the carrier had reached an agreement with Apple to distribute the iPhone in France. The two firms were widely expected to announce launch plans during the final week of September along side Apple Expo Paris.

The Paris expo came and went without any such announcement, however. Meanwhile, Apple along with partners O2 and T-mobile officially announced plans to roll out the handset next month in the U.K. and Germany, respectively.

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[deanbar]

You would have thought that Apple's lawyers would have looked into this early on. Another poster from Belgium previously said that it was illegal to sell locked phones there also. Seems strange for this to rear its head so late in the day. Perhaps Apple were just getting too greedy in the end. They certainly seem to be getting more and more that way, much the same as Microsoft.

You would think this would be one of the first things their marketing people investigated.

[shetline]

I'd like to see the laws everywhere force the independence of the phone you buy from the carrier you use it with. Then Apple would have to choose between selling a phone that anyone can use with any carrier (at least signal-compatible carrier -- at this point, that's any GSM carrier) and not selling a phone at all.

I'm sure Apple could still make lots and lots of money selling a phones in a much more open market.

[JeffDM]

It almost doesn't make sense for that to stop the deal. I think it makes more sense to offer an unlocked unit at double the price, some would go to Apple, some would go to the official local iPhone carrier anyway.

The only problem is that it would provide a template for independent unlocking. the best thing I can think of to stop that is put in a minor change in the hardware that differentiate the two so that an independent unlocker would have to get inside and risk breaking the phone anyway.

[ajmas]

The sort of issues Apple is experiencing in France, is going to be noticed in some other European countries too. Heck, in Belgium you aren't even allowed to sell a locked phone.

Apple is going to quickly learn that when it comes to telecoms, the west of the world plays differently than North America. I think it is time they woke up and changed their business model, with regards to the iPhone.

[ZO]

HAHAHAHAHA

FU APPLE

FREE THE DAMN iPHONE ALREADY!!!!!!!!!!!!!!!

[Kavik]

The dilemma for Apple is that allowing unlocked phones in France jeopardizes their exclusivity deals elsewhere, particularly for Europe. Why lock yourself into a 2-year contract with O2 or T-Mobile (in the UK and Germany, respectively) when you can head to France (for some a short drive/flight/rail trip) and buy the unlocked version and use a cheapo prepaid SIM from the corner store. And you know there will be heavy international eBay trade in officially unlocked iPhones from France if this happens.

[ajmas]

How long are the exlusivity contracts until?

I wonder whether they could add firmware to 'unlocked' versions that would prevent them using SIMs with companies they have signed exclusivity contracts with. I admit this would be convoluted, but maybe a compromise solution.

[Rot'nApple]

Originally Posted by deanbar

You would have thought that Apple's lawyers would have looked into this early on. Another poster from Belgium previously said that it was illegal to sell locked phones there also. Seems strange for this to rear its head so late in the day. Perhaps Apple were just getting too greedy in the end. They certainly seem to be getting more and more that way, much the same as Microsoft.

You would think this would be one of the first things their marketing people investigated.

It wouldn't have mattered. If there was no law to begin with, what's to stop the French government to create a law after the fact. Didn't the French lawmakers do something similar with regards to the iPod and then had to alter it's law or something?!

[Taskiss]

Originally Posted by ZO

HAHAHAHAHA

FU APPLE

FREE THE DAMN iPHONE ALREADY!!!!!!!!!!!!!!!

France has 53 million mobile cellular customers, the EU (without France) has 413 million, the USA has 233 million. Not having France as a market doesn't really matter, as I see it.

[macFanDave]

Originally Posted by Taskiss

France has 53 million mobile cellular customers, the EU (without France) has 413 million, the USA has 233 million. Not having France as a market doesn't really matter, as I see it.

Not all of the member states of the EU are as affluent as France, so France's 53 million customers are disproportionately valuable as potential iPhone users. You'd walk away from a customer base that is nearly a quarter of the size as your domestic base? You're an idiot!

It can be argued that Apple caved in to the oppressive demands of AT&T to get the iPhone launched in the US. Now that its initial success has been proven, Apple has no need to agree to the restrictive terms that we've accepted.

[Taskiss]

Originally Posted by macFanDave

You'd walk away from a customer base that is nearly a quarter of the size as your domestic base? You're an idiot!

Perhaps you're right.

Perhaps Apple should start selling Mac's with Windows installed, too. Just drop OS X all together. After all, it's all about the domestic base, right?

Then again, I believe that sometimes you have to walk away from doing business with someone if you don't want to make the concessions they demand you make. If that's the case, then perhaps you're not right.

[freelander51]

Originally Posted by deanbar

You would have thought that Apple's lawyers would have looked into this early on. Another poster from Belgium previously said that it was illegal to sell locked phones there also. Seems strange for this to rear its head so late in the day. Perhaps Apple were just getting too greedy in the end. They certainly seem to be getting more and more that way, much the same as Microsoft.

You would think this would be one of the first things their marketing people investigated.

Yup you're right - as i said previously SIM lock and coupled sales (hardware + subscription in one go) are totally against the law in Belgium. It will be interesting to see how they will get around this....

Originally Posted by JeffDM

It almost doesn't make sense for that to stop the deal. I think it makes more sense to offer an unlocked unit at double the price, some would go to Apple, some would go to the official local iPhone carrier anyway.

Ah and this is where the french law kicks "you" in the teeth - the phone needs to be offered at the same price. After all the bally-ho Apple did that they did NOT want cross subsidies, anyone that can read knows that stance. And the french consumer body is already looking at it with pleasure. Their comment was "Apple or no Apple - no one is above the law"

[freelander51]

Originally Posted by Rot'nApple

Didn't the French lawmakers do something similar with regards to the iPod and then had to alter it's law or something?!

No that pertained to capping the volume level on iPods as legislations stipulates that the noise level shall not be above 105 (or 100 dB). But you can unblock it afterwards.

France is particular anyway : Red Bull is illegal there -too much caffeine...

But they DID send some troops to the US to fight of the colonial Brits and sold you Louisiana....

[SpamSandwich]

This news is not good for Apple to meet their own sales projections, and it is not good for revenue... on the other hand, I have no idea why AAPL is up almost 4 points this morning...

[bryand]

The main reason for buying an unlocked iphone is to get one when you live in a country where you can't buy them yet. All Apple has to do is delay the sale of unlocked units until all the other countries are offering iphones.

The exclusivity deals will be a little less lucrative, but that's out of Apple's control. They can't change the law and I doubt that they will just leave out all the countries that have laws requiring the sale of unlocked phones. Besides, their phones are already being unlocked in the U.S. so the issue is moot.

[auxio]

Originally Posted by Taskiss

Perhaps Apple should start selling Mac's with Windows installed, too. Just drop OS X all together.

How is that analogy even relevant? Let's see: Mac = iPhone ... ok, that works ... Mac OS X = exclusive carrier ... huh?

Locking a Mac into Mac OS X is equivalent to locking the iPhone to, well, Mac OS X (iPhone version).

The analogy that really fits here would be locking a Mac to a particular internet service provider. Now just imagine that... people would think it's absurd, there would be outrage. Yet, because of how the cellular industry has developed, it's just accepted by everyone that phones can be locked to a particular cellular service provider.

This is exactly the reason why I've always hated cell phones and continue to use them as sparingly as possible. Because literally every time you press a damn button on them it's costing you money. And every single phone has different user interface (and incompatible add-ons), and may or may not work with your computer. It's such a joke industry.

My wife is shopping for a new phone and it's ridiculously complicated trying to figure out which networks it will work on, whether you can use it in other countries easily, whether it will sync with her Mac.

I for one am glad the OpenMoko project is finally coming to fruition (even if it lacks some features still). I'm looking forward to the day where a cell phone is as open as a computer (ie. you can choose any service provider, it works on any network, choose any add-ons, sync with it in a standard way, etc).

[Rolo]

Apple might as well offer unlocked phones in Europe and just charge more for them. Locked: $399, unlocked: $599. The Nokia N-95 is unlocked but it costs $700.

France might as well be written off by Apple, though, since they have such screwed up laws. Look at all the crap Apple had to go through with iTunes. Beaucoup de merde.

[aaarrrgggh]

Originally Posted by Taskiss

Perhaps you're right.

Perhaps Apple should start selling Mac's with Windows installed, too. Just drop OS X all together. After all, it's all about the domestic base, right?

Then again, I believe that sometimes you have to walk away from doing business with someone if you don't want to make the concessions they demand you make. If that's the case, then perhaps you're not right.

There are a couple simple problems with that logic.

Western Europe is the prime market for the iPhone as it stands today. Language support is too limited for it to make it commercially viable in most of Asia, and price is likely to cause it to fail in much of eastern Europe from a mass-market perspective.

Suddenly, out of the 1B phones sold a year, Apple's market penetration drops significantly to the point that they would need an impossible share in the US, UK, and Germany to pull it off. Commercially, their current strategy is bound to fail at some point. They will have to sell them unlocked in enough of the world that they might as well just charge an extra $200 for an unlocked version now and be done with it. The initial uptake is really what they need to grab in a country, but 5-year exclusivity is stupid.

[city]

It time to retalliate! If France is going to essentially outlaw a United States product to protect a market, then they can drink their wine-all of it.

[auxio]

Originally Posted by Rolo

Apple might as well offer unlocked phones in Europe and just charge more for them. Locked: $399, unlocked: $599.

Right, because the extra cost is justified by the amount of work it takes them to unlock it. That makes sense.

France might as well be written off by Apple, though, since they have such screwed up laws. Look at all the crap Apple had to go through with iTunes. Beaucoup de merde.

Right, because having phones locked to a particular provider is the way things are supposed to be. God forbid any other country creates laws which differ from the ones passed down by the almighty himself in the USA. One god, one truth, one market, one culture.

[JeffDM]

Originally Posted by city

It time to retalliate! If France is going to essentially outlaw a United States product to protect a market, then they can drink their wine-all of it.

I think your interpretation is off the mark, and a prejudiced one at that. In this case, it doesn't look like it is oulawing a US product to outlaw a US product, it's just outlawing certain practices. The fact that Apple doesn't want to deal with that is Apple's choice.

Requiring unlocked phones to cost the same is kind of bizarre to me though, I didn't know about that part.

[JeffDM]

Originally Posted by auxio

Right, because the extra cost is justified by the amount of work it takes them to unlock it. That makes sense.

That wasn't the point though, it's not the cost to unlock. Rightly or wrongly, Apple seems to consider the subscriber revenue as part of the price of the product. From figures I've heard, $200 should cover that part, but then, it sounds like charging any extra for an unlocked version is illegal there.

[shetline]

Originally Posted by Rolo

Apple might as well offer unlocked phones in Europe and just charge more for them. Locked: $399, unlocked: $599. The Nokia N-95 is unlocked but it costs $700.

France might as well be written off by Apple, though, since they have such screwed up laws. Look at all the crap Apple had to go through with iTunes. Beaucoup de merde.

The "problem" with the laws in France in regard to things like cell phones and digital music is that they're more pro-consumer instead of pro-big-business.

The airwaves the carriers use, and that cell phones transmit on, are a public commodity. The use of those airwaves should be licensed out in terms favorable to consumers, not favorable to big businesses attempting to maximize profit through artificially-imposed restrictions and artificially-imposed lack of service mobility.

I wish more countries had the guts to tell the lobbyists for the big carriers to go screw themselves, to enforce consumer-friendly terms on them in exchange for their use of the airwaves which belong to the public.

[auxio]

Originally Posted by JeffDM

That wasn't the point though, it's not the cost to unlock. Rightly or wrongly, Apple seems to consider the subscriber revenue as part of the price of the product. From figures I've heard, $200 should cover that part, but then, it sounds like charging any extra for an unlocked version is illegal there.

I admit, that's a bit strange deciding how much companies can charge for their products. I'd think that a bit of healthy competition from the OpenMoko phone when it comes out should solve any price gouging issues (the market will take care of itself in that case).

But I do support the law which forces phones to be unlocked. I think that it's a step in the right direction for consumers.

[city]

Originally Posted by JeffDM

I think your interpretation is off the mark, and a prejudiced one at that. In this case, it doesn't look like it is oulawing a US product to outlaw a US product, it's just outlawing certain practices. The fact that Apple doesn't want to deal with that is Apple's choice.

Requiring unlocked phones to cost the same is kind of bizarre to me though, I didn't know about that part.

Fine they can sell wine in the U.S., but they can only use grape varities and names otherwise available in the U.S. Let's also require srew off caps.

[EagerDragon]

Well either France gives O2 / Apple an exception to the law ...... or France will not get the iPhone.

Sometimes you have to amputate a leg to save the patient. While hard to swallow, I bet on no phone for France.

BTW ... Where that 30% number come from?

[EagerDragon]

Originally Posted by Kavik

The dilemma for Apple is that allowing unlocked phones in France jeopardizes their exclusivity deals elsewhere, particularly for Europe. Why lock yourself into a 2-year contract with O2 or T-Mobile (in the UK and Germany, respectively) when you can head to France (for some a short drive/flight/rail trip) and buy the unlocked version and use a cheapo prepaid SIM from the corner store. And you know there will be heavy international eBay trade in officially unlocked iPhones from France if this happens.

100% with you on this.

[EagerDragon]

Originally Posted by deanbar

You would have thought that Apple's lawyers would have looked into this early on. Another poster from Belgium previously said that it was illegal to sell locked phones there also. Seems strange for this to rear its head so late in the day. Perhaps Apple were just getting too greedy in the end. They certainly seem to be getting more and more that way, much the same as Microsoft.

You would think this would be one of the first things their marketing people investigated.

American Lawyer using Google to translate the French Law, may had misunderstood what it said.

[auxio]

Originally Posted by shetline

I wish more countries had the guts to tell the lobbyists for the big carriers to go screw themselves, to enforce consumer-friendly terms on them in exchange for their use of the airwaves which belong to the public.

While I support your main idea (laws which are favorable to consumers), I am not blind to the fact that it costs money to build and maintain cellular towers.

So while the "air" might belong to everyone, the cell towers (and maintenance of them) are funded by service providers, and so they need to recoup that operating expense.

Regardless though, it's simply because cellular companies have developed their revenue/profit models based on the current system, and their shareholders are banking their money on that system (ie. for revenue streams to stay the same), that there is a lot of resistance to change. The market will not take care of itself in this case, and so governments must step in to regulate things if anything is to change.

[JeffDM]

Originally Posted by city

Fine they can sell wine in the U.S., but they can only use grape varities and names otherwise available in the U.S. Let's also require srew off caps.

Your bizarre arguments don't even make sense. Kind of like those mathematical proofs where half the steps are missing. While we're at that, I might as well suggest that you want a system where Apple will only sell you a computer if you sign up for two years of AOL.

[Rot'nApple]

Originally Posted by auxio

How is that analogy even relevant? Let's see: Mac = iPhone ... ok, that works ... Mac OS X = exclusive carrier ... huh?

Based on the reply to his comment... "Not all of the member states of the EU are as affluent as France, so France's 53 million customers are disproportionately valuable as potential iPhone users. You'd walk away from a customer base that is nearly a quarter of the size as your domestic base (233 million)? You're an idiot!"

He responded by saying... "Perhaps Apple should start selling Mac's with Windows installed, too. Just drop OS X all together"

I believe the analogy that he was going for is Mac OS = One Quarter market share and MS OS = Three Quater market share. Switch to MS OS to the Mac and have a greater base to sell to. Or in other words, why stay with a customer base that is only one quater in size versus a three quater marketshare that's out there.

[auxio]

Originally Posted by Kavik

The dilemma for Apple is that allowing unlocked phones in France jeopardizes their exclusivity deals elsewhere, particularly for Europe. Why lock yourself into a 2-year contract with O2 or T-Mobile (in the UK and Germany, respectively) when you can head to France (for some a short drive/flight/rail trip) and buy the unlocked version and use a cheapo prepaid SIM from the corner store. And you know there will be heavy international eBay trade in officially unlocked iPhones from France if this happens.

Yup, we all understand the bed that Apple has made for themselves by inking an exclusivity deal. I have a feeling that it might very well be the undoing of the iPhone if/when other open phones catch up technology-wise. Multitouch isn't all that hard to implement -- I'm guessing 2 years tops for other phone manufacturers.

While I love the Mac OS experience, for me, it just doesn't justify being locked in to a contract. Even if there isn't much choice out there for service providers, I'd still like the option of different plans based on my usage.

[shetline]

Originally Posted by auxio

So while the "air" might belong to everyone, the cell towers (and maintenance of them) are funded by service providers, and so they need to recoup that operating expense.

That's certainly true. I don't expect carriers to operate cellphone networks as a charitable public service. But it's not like their isn't enough profit margin here for governments, on behalf of the majority of their citizens, and not based on cronyism and the relative size of campaign contributions, to strike a better deal on behalf of consumers, while still providing terms good enough for the carriers to be able to build profitable business enterprises around their use of the public airwaves.

[nolly]

Originally Posted by EagerDragon

Well either France gives O2 / Apple an exception to the law ...... or France will not get the iPhone.

Sometimes you have to amputate a leg to save the patient. While hard to swallow, I bet on no phone for France.

BTW ... Where that 30% number come from?

Then no Iphone for Denmark and many other european countries.
In Denmark, the law permits only 6 month forced locking.

[Amorya]

Originally Posted by JeffDM

Your bizarre arguments don't even make sense. Kind of like those mathematical proofs where half the steps are missing. While we're at that, I might as well suggest that you want a system where Apple will only sell you a computer if you sign up for two years of AOL.

You jest, but here in the UK you can get a free Dell laptop if you sign up for two years of AOL.

Amorya

[Taskiss]

Originally Posted by auxio

How is that analogy even relevant?

Because macFanDave believes the size of the potential customer base should dictate the decisions a company makes. With that defining the parameters around a decision, Apple should abandon OS X for it's hardware products because the customer base for Windows is much larger.

Oh, and it's not really relevant, it's the logical conclusion one would come to if they allowed the potential customer base to dictate decisions. It's pretty obvious that Apple doesn't feel the size of the potential customer base has as much importance as macFanDave feels it should, or else they'd be a Windows vendor.

Apple seems quite happy delivering products to a select few who share their philosophical approach to technology.

Originally Posted by aaarrrgggh

There are a couple simple problems with that logic.

Western Europe is the prime market for the iPhone as it stands today. Language support is too limited for it to make it commercially viable in most of Asia, and price is likely to cause it to fail in much of eastern Europe from a mass-market perspective.

Suddenly, out of the 1B phones sold a year, Apple's market penetration drops significantly to the point that they would need an impossible share in the US, UK, and Germany to pull it off. Commercially, their current strategy is bound to fail at some point. They will have to sell them unlocked in enough of the world that they might as well just charge an extra $200 for an unlocked version now and be done with it. The initial uptake is really what they need to grab in a country, but 5-year exclusivity is stupid.

Perhaps, but it depends on how valuable Apple feels it's exclusivity for the device is, as well as what they perceive is really the product. If it's JUST the iPhone, then I'd agree with you. If, though, they feel that the communication experience that the iPhone delivers is an important part of the product, then they could feel that their ownership of that part of the product is compromised if they allow outside influences.

Apple's an odd company. It's both a software company and a hardware design company. They think different.

[Project2501]

Originally Posted by auxio

While I support your main idea (laws which are favorable to consumers), I am not blind to the fact that it costs money to build and maintain cellular towers.

So while the "air" might belong to everyone, the cell towers (and maintenance of them) are funded by service providers, and so they need to recoup that operating expense.

So? Network building and maintenance costs something, and people transfer bits over that network. From that you can count what is the price for one bit. Very simple. That bit costs the same regardless of the phone set it was consumed on, does it not? Now, building a phone costs something, and those costs are the same, regardless of operator who will provide the service for that phone? No one is saying that operators aren't allowed to set the price for the bit, but why should they be allowed to set the price for the phone, or dictate to what network that phone can connect to? Apparently it takes government to draw the lines for greed. On markets where huge initial investments are needed and/or existing players actually are monetizing government built architecture, new players just can't enter to market and free market just can sort things out.

[Kavik]

Originally Posted by Amorya

You jest, but here in the UK you can get a free Dell laptop if you sign up for two years of AOL.

Amorya

The key is "get" -- there is a big difference between "getting something" (reduced product or service cost, free item, or other bonus) for signing up for a contract, and being forced to accept a contract (with no subsidy) when it is not the standard practice for that industry (in this case cell phones).

[macinthe408]

Originally Posted by AppleInsider

France may not see iPhone this year

Le boo, le hoo.