T-Mobile likely to be German iPhone operator

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Apple Inc. has picked Deutsche Telekom AG's T-Mobile to sell the iPhone in Germany, gaining access to 34 million subscribers in Europe's biggest wireless market.

Article ToolsPrinter friendly E-mail to a friend Technology RSS feed Available RSS feeds Most e-mailed Reprints & Licensing Share on Digg Share on Facebook Save this article powered by Del.icio.us More:Business section Latest business news Globe front page Boston.com Sign up for: Globe Headlines e-mail Breaking News Alerts The 8 gigabyte handset will be priced at $557, including tax, and go on sale Nov. 9. The phone will run only on T- Mobile's network.

T-Mobile, which lost out on the iPhone business to AT&T Inc. in the United States and to O2 PLC in the United Kingdom, may be able to bolster customer spending with the device. Apple's chief executive, Steve Jobs, who chose the largest carrier in each country to sell the iPhone, cited the quality of T-Mobile's network.

Deutsche Telekom is Europe's largest phone company; T-Mobile sells wireless services to 112 million customers in 11 European countries and the United States.
Jobs is counting on the iPhone to become Apple's third major business, along with Macintosh computers and iPod media players, which each bring in about $10 billion in annual sales. As of Sept. 10, Apple and AT&T had sold more than 1 million iPhones.

The device combines the iPod music and video player with a phone featuring a Web browser and e-mail access. The handset went on sale in the United States in June. Apple this month slashed the price by a third to $399 to spur holiday purchases. Jobs has forecast sales of 10 million iPhones worldwide in 2008.

About 3 million iPhones may be sold in Europe, Citigroup Inc. analyst Andrew Lee wrote in a note.

"They have the best network in Germany," Jobs said of T-Mobile at the news conference yesterday. "There's also a real cultural fit."

The iPhone price in Germany compares with $538 in the UK, where O2 has almost 18 million clients.

Apple hasn't announced its partners in France, Italy, or Spain. Vodafone Group PLC, the world's largest mobile-phone operator, wasn't selected as a partner in any country.

Apple and T-Mobile declined to give financial details of their partnership, such as how revenue will be shared. T-Mobile plans to announce customer contract terms before Nov. 9.

In the United Kingdom, Apple may receive 10 percent of O2's monthly subscriber fees, mirroring its deal with AT&T, Robert Semple, an analyst with Credit Suisse in New York, said in a report. Apple hasn't publicly disclosed the terms of the AT&T agreement.

Mobile-phone sales are expected to reach 178 million units this year in the 16 countries that make up Western Europe, about the same number that will be sold in the United States, said Carolina Milanesi, research director for mobile devices at Gartner Inc., a market researcher in Stamford, Conn.

Jobs has said he wants 1 percent of the global handset market next year. In Europe, challengers to the iPhone include Nokia Oyj's upgraded version of the N95 handset, which has 8 gigabytes of memory and is due to ship soon.

Also next quarter, Sony Ericsson Mobile Communications will start selling its W910 and W960 Walkman phones. LG Electronics Co.'s Prada has a touch-screen display similar to the iPhone's.

Outside Apple's store on Fifth Avenue in New York, shoppers lined up as much as three days before the iPhone went on sale.

"IPhone is coming up against some strong European brands," said Theodoor Gilissen analyst Wing-Yen Choi. "Whether iPhone will succeed or not will depend a lot on how it's doing in Europe. I don't see Europeans sleeping in the streets to queue up for the phone."

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