iPhone a no-show at Apple Expo (and now we know why)

The Apple Expo — Europe's largest Apple and Mac tradeshow — kicked off in Paris this week to little fanfare. Not helping matters was the conspicuous absence of iPhone, which had been widely expected to make its French debut at the conference. So it doesn't take a genius to figure out that something went awry.

For the past three days, that something has been the subject of considerable debate, especially considering that a spokesperson for France Telecom told Dow Jones last Thursday that company had definitively "signed an agreement with Apple to sell the iPhone."

In addition, other stars seemed to be aligning at precisely the right time — Apple chief executive Steve Jobs had planned a lengthy trip to Europe and in the days leading up to the Paris expo had ushered the iPhone into both the UK an Germany during separate press conferences in those respective regions.

So what happened? According to a report posted to the Challenges website Thursday, France Telecom — which umbrellas the Orange brand — and Apple are struggling to come to an agreement on the distribution of the handset in France.

Without citing sources, the French weekly said Apple and the French carrier are also at odds over the percentage of service revenues the telecom operator had to give to Apple as part of the distribution deal (reportedly 10 percent). Should the two parties fail to reach an agreement quickly, the launch of the iPhone in France ahead of the crucial Christmas season could be jeopardized, the report added.

This has left more than a few onlookers scratching their heads. Did France Telecom jump the gun before the ink on its contract with Apple had time to dry? Was its statement last Thursday a miscommunication between corporate and media relations? Or did the carrier pull an abrupt 180 and elect to bow out of a just-signed agreement within a certain grace period?

Those questions still seek answers.