Apple talks to Chinese operators: Euro-launch is modest, but Chinese say no rev-share here

The iPhone story went global this month with launches in the United Kingdom and Germany and word that Apple Inc. is exploring a partnership in China. France’s Orange is set to sell the device beginning Nov. 29.
Apple’s international success, or lack of it, will be a major indicator of its ability to succeed in the wireless industry. So far, it has demonstrated that it has a substantial consumer base in the United States and that Americans are willing to pay top dollar for the latest, coolest gadget. Whether it can replicate that success elsewhere, or simply gain a foothold in other markets through an exclusive carrier arrangement, is the drama unfolding now.
The European reception has yet to be measured in terms of solid sales data, following the Nov. 9 launch by O2 in the U.K. (parent: Telefonica) and by T-Mobile in Germany (parent: Deutsche Telekom).
But the initial response-despite the expected, television-friendly images of British and German fanboys queuing up outdoors for the initial sale-appeared to be a much-muted version of the device’s launch in the United States.
T-Mobile reported 10,000 units sold in Germany on the first day of the iPhone’s availability. Carphone Warehouse, which has rights to retail the device alongside O2 in the U.K., had said before the launch that it projected first-day sales of 10,000 as well. O2’s CEO Matthew Key has forecasted iPhone sales between the operator and the retailer at 200,000 by year’s end, a seven-week period following the launch.
The industry will be eagerly awaiting hard data, as various players from handset vendors to network operators assess Apple’s impact beyond the U.S., where it sold more than 200,000 units on its weekend debut beginning June 29 and more than 1.1 million units in the first full quarter of sales.
Several factors have been widely cited as slowing the Apple juggernaut in Europe including the device’s reliance on EDGE network speeds and its relatively high price. Brits must pay about $567 for the device (compared to $400 in the U.S., following a price cut from $600) and the least-expensive service plan costs about $74 per month over 18 months. That’s a $1,332 commitment.
U.K. operators, like their U.S. counterparts, offer a number of high-end devices for free with a service contract. The other potential turnoff for Europeans, according to analysts: the device’s exclusive tie to a specific carrier. The iPhone launch in France, in contrast, must rely on unlocked devices due to French law. In the U.S., as many as 250,000 devices out of about 1.5 million sold to date have not shown up on AT&T Mobility’s network-and are presumably the subject of unlocking efforts and resale in various markets, leading Apple to allow only credit and debit card purchases.
The giddy human expression noted on U.S. fanboys’ faces, however, appeared to be replicated in the U.K. and Germany as photographs of the iPhone’s first Euro-customers were transmitted worldwide.
That giddiness appeared to extend to stock traders in Hong Kong as news spread of Apple’s early talks with China Mobile and China Unicom, China’s two largest carriers. Shares of both carriers surged 9% and 6%, respectively, on word of the talks. The Chinese market offers more than 500 million subscribers overall and 1% of that market would give Apple half its sales goal of 10 million devices by the end of next year.
One sticking point, according to media reports: Chinese operators will not share their revenue, an arrangement that Apple has insisted on in its deals to date.