With fans lining up around the block in front of retail stores in the UK, France, and Germany to purchase Apple's innovative new iPhone communications device, one might think the company's latest product was off to a fast start in its second major sales push. But Apple has bumped into harsh consumer protection regulations in Europe that threaten to derail its plan to tightly couple the iPhone with specific wireless carriers as it does in the United States.
This week, a German court ruled that T-Mobile, the exclusive wireless carrier for the iPhone in that country, must decouple the device from a two-year service agreement. This decision means that German customers can purchase the iPhone for use with other networks, a freedom that, at least thus far, eludes iPhone users in other countries. In the United States, in particular, AT&T's notably poor wireless network has hobbled the iPhone and garnered poor reviews.
The German decision is the result of a legal accusation by Vodafone: Vodafone was hoping to secure the iPhone contract for all of Europe, but was unable to secure a deal in any of the first three EU countries to offer the iPhone. However, Vodafone says it won't seek similar injunctions in other European Union (EU) countries.
It might not have to: In France, the exclusive iPhone deal between wireless carrier Orange and Apple is under review because it violates French law. In that country, Apple is required to allow other wireless carriers to sell the iPhone as well. To partially comply with this requirement, Orange will sell "unlocked" versions of the iPhone that will work on other networks. But Orange has yet to announce pricing or contractual details for the iPhone, which it plans to start selling in France next week. Presumably, the unlocked version will cost more than the locked one.
Also in question is how Apple's product-tying strategy will play out in other EU countries. The company has yet to announce plans to sell the iPhone elsewhere in Europe, and it's unclear whether Apple will be able to secure exclusive deals around the EU, thanks to stringent consumer-protection laws there.
Correction: The original version of this article stated that Vodafone was the exclusive iPhone carrier in the UK. This is incorrect: O2 is the exclusive carrier there. Sorry for any confusion this may have caused. --Paul