• The New York Times, Wednesday, November 21, 2007 11:30 AM

Apple's plan to bring the iPhone to market in Europe using the same exclusive carrier model it deploys in the U.S. has already hit a few roadblocks--although that might not necessarily be a bad thing for Apple. It's far worse for Apple's carrier partners, which earn the bulk of their iPhone revenues from sales of mobile phone subscriptions. Last month, French law prohibited Apple from selling its iPhone through an exclusive agreement with Orange. The company is now being forced to sell so-called "unlocked" iPhones so that users of any mobile carrier can purchase the phone.

Today, the same issue has come to light in Germany, where Apple has an exclusive agreement with T-Mobile. Last week, competitor Vodaphone won the first round of a legal case with T-Mobile over its deal to sell locked iPhones. The German court ruled that the Deutsche Telecom company had to offer the iPhone to everyone without locking them into the 24-month contract that was part of its arrangement with Apple. Vodafone seeks a similar sort of arrangement in Great Britain.

Several European countries have laws in place that protect consumer from having to buy something as a condition of buying something else. Britain, the No. 2 EU market, doesn't have these restrictions, allowing O2, a subsidiary of Spain-based Telefonica, to sell the handset with an 18-month contract. So far Apple is only selling the iPhone in the top three European markets: Germany, Britain and France.

Read the whole story at The New York Times »