Katie MarsalApple is in talks with its exclusive French wireless carrier, Orange, to lower the price of the iPhone in France following disappointing sales, Les Echos is reporting.
Although Orange's parent firm France Telecom reportedly denied that it would cut pricing, Apple's two other European wireless partners were recently compelled to instate significant cuts on their own iPhone offerings.
In a move allegedly aimed at clearing inventory of the current generation handsets ahead of 3G models, O2 this month dropped the price of the 8GB iPhone in the UK ">to 169 pounds ">by 300 euros
A report published Friday by UK's Times Online suggests that those European carriers will be forced to absorb the brunt of the cuts, which will translate into "significant losses."
"O2, which sells the phone in the UK, and T-Mobile, the German distributor, are said to have significantly overestimated the number of first version iPhones that would sell in Europe," the publication said.
The report cites Morgan Stanley analyst Katy Huberty as largely blaming the European mobile executives for the misstep, as they became over-excited as and got caught up in hype following the US iPhone launch last June:
"They had since had to take steps to shift stock on which they would now make a loss in order to clear the shelves for the new 3G iPhone, which is expected to be in greater demand in Europe than in the US because of the more advanced phone networks."
Citing its own sources, the Times also reported that Apple has placed an order with its Asian suppliers to produce 200,000 of the new 3G iPhones by the end of May, rising to 2 million - 500,000 per week - in June.
"With a four week lead time between production and placement, that would leave [Apple chief executive Steve Jobs] free to launch the device during an annual developers conference at which he usually speaks," the publication said.
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304 Comments
The article forgets to mention the much debated notion here on AppleInsider that all the low French and European iPhone sales are due to them being purchased here in NYC due to the exchange rate difference. They need to factor all those missing AT&T phones into the picture.
Remember: The French and europeans plan their vacations around buying an iPhone!
Katy Huberty is a numpty.
The reason the iPhone has failed to sell well in Europe is because it is way too expensive for this market. And the reason for that is Apple saddled it with the baggage of it's own greed.
The only failure of the managers she chastises was their lack of guts to tell Apple where exactly they could stick it. NONE of them should have agreed to Apples greedy ways, they should have declared Europe an iPhone free zone.
The European market is predominantly pre-paid, and becoming more so at a steady rate. Apples model of dipping it's piggy snout into the call revenue stream does not fit well with a pre-paid market.
I feel sorry for the European Network operators. They have been well and truly suckered if they are having to wear the full cost of the unsold inventory discounting.
The iPhone failing in Europe so spectacularly has put a big on my face - love it!
Remember: The French and europeans plan their vacations around buying an iPhone!
Er, no we don't.
The article forgets to mention the much debated notion here on AppleInsider that all the low French and European iPhone sales are due to them being purchased here in NYC due to the exchange rate difference. They need to factor all those missing AT&T phones into the picture.
Remember: The French and europeans plan their vacations around buying an iPhone!
Most of these "missing" iphones were bought up by organized businesses to be shipped to China --- not to Europe.
Don't know why you'd celebrate the so-called "failing" of the iPhone in Europe. How exactly does that benefit you, as a consumer?
More of the same baseless complaints about Apple and the iPhone: "it's too expensive!" "they're greedy!" "it's overhyped!" Simple solution for all the complainers: don't buy it. It's a choice, remember?
Obviously, for a lot of consumers, the iPhone represents a strong value. Even in France, 100,000 users have bought the dang thing.
Any way you slice it, the iPhone has been a success. In some places it's been a more spectacular success than in others--but everywhere it's been a success, in that it's one of the hottest selling new phones ever introduced in each respective market.