Tough going for iPhone in Europe

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Despite glowing reports from the three operators in Europe that offer the iPhone, all might not be quite so rosy. According to analyst reports, iPhone sales in Europe did not meet the Q4/07 target, and have again failed to hit the number in the first quarter of 2008.

"Our research indicates that European shipments to date have been far below expectations," said Richard Windsor, an analyst with Nomura Securities. This viewpoint is supported by the market research firm Strategy Analytics, which estimated that the three operators sold a combined 350,000 iPhones in Q4 of last year, short of the consultancy's forecast of 500,000. It also estimated sales in the first quarter of 2008 dropped to 300,000. There were 2 million iPhones sold last year in the U.S. by AT&T.

Separately, The French newspaper Les Echos has reported that Apple has asked Orange to lower the price of the iPhone to boost sales. The U.S. company is said to be pushing Orange to adopt a subsidised model for the iPhone--as is used by O2 and T-Mobile. Orange has responded that the business model is working well and there is no question of changing it.

A route forward, as rumoured by Les Echos, was for Orange to agree to subsidise the iPhone in return for a revision to the revenue-sharing agreement with Apple.

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