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MacEdition: iPhone Europe Sales Demonstrate Apple Still Has Some Work to Do

iPhone Europe Sales Demonstrate Apple Still Has Some Work to Do · 2008-01-04

As Apple prepares to report on its first quarter results in a couple of weeks, expect to hear a lot of things about iPhone and iPhone sales. Many say that Apple is looking good to meet their sales targets 10 million units by the end of 2008 having sold nearly 5 million handsets so far.

In order to meet its targets, Apple is relying largely on growth in new markets, including Europe and Asia. The iPhone has been on sale in Europe only a few months, and its success depends largely on who you ask. In early December people touted that the iPhone was doing better than expected but by the end of the month, some outlets reporting iPhone sales failed to meet their projections, at least in the UK. In France, the iPhone sold 70,000 units in line with projections, but almost half of those were in the first week.

Apple may still meet its projections, but if the iPhone is going to be continued success in world markets, there will probably be some changes needed after the initial contracts run out. Partnering with AT&T in the US made sense because consumers here are used to being locked into one carrier. In Europe, where people are used to plugging their SIM cards into whatever device they think is necessary, and where some countries outlaw locked phones, things are a little different. I think Apple could have gone into Europe without exclusive carriers, but without the same Apple Store infrastructure, they needed some sort of incentive to get their products on retail shelves.

The other big problem with the iPhone is the price. Although the iPhone price is similar to competing smart phones, various things conspire to make it a lot less of a good deal in most of Europe. In France, the price of 399 Euro would equal $589. In the UK, the price is equivalent to $531. To get an unlocked phone will run you even more. Yes, straight currency conversions are not a particularly good judge, and non-US customers pay the Apple Tax on all of their products, but with more handsets available from more carriers in the EU, they might have to change their strategy.

— Joe Fahs


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