France may miss out on iPhone

Stephen Withers
Monday, 08 October 2007 03:48

Your IT - Mobility

France Telecom CEO Didier Lombard's announcement that the company's Orange operation will sell iPhones may have been premature.

French newspaper Les Echos reports the relationship between Apple and Orange is not going smoothly.

While there is a suggestion that Apple CEO Steve Jobs took offence when Lombard made the announcement without him, a bigger stumbling block seems to be a French law that prohibits any requirement that a product and a service are purchased together. This threatens Apple's plans for a single iPhone carrier in each geography.

Despite Apple's professed dislike of handset subsidies, one possibility would be to offer an unlocked iPhone in France at a price significantly higher than that of the phone plus two years service. That might have a sufficient deterrent effect without falling foul of the law, but it could also make France the centre of an international grey market in iPhones.

According to Les Echos, a source at Orange said “The risk we are evaluating is that Apple crosses France [off the iPhone list]. We have a plan B. There is still a chance that we have the iPhone, but we are very close to the limit where the company's plan is endangered."