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Thursday, 08 May 2008 No iPhone price cut for France

France Telecom/Orange looks forward to new model iPhone

Peter Sayer

France Télécom/Orange will wait for Apple to update its iPhone before changing the existing model's price - even though the high price of the iPhone in France is hurting sales.

"At around €400, it doesn't appeal to everyone," said chief financial officer Gervais Pellissier, in a conference call with journalists, noting that there are other smartphones on the market at much lower prices.

Nevertheless, the company does not plan to make any changes to its iPhone pricing policy for now, he said.

"We'll see with the next model," said Pellissier, adding that the arrival of a new iPhone "will boost sales."

The current iPhone works only with EDGE (Enhanced Data Rates for GSM Evolution) networks and cannot exploit the higher speeds of 3G (third-generation) mobile networks or the more advanced HSPA (High Speed Packet Access) networks available in some markets. Apple is widely expected to reveal an updated iPhone with 3G capabilities next month.

Sales of the iPhone have been strong so far in the US - Apple says it has sold millions since its exclusive launch with AT&T Wireless last June - but demand in Europe has been slower.

Pellissier declined to give exact sales figures, but said France Télécom had sold "more than 100,000 iPhones."

Orange, the mobile phone and Internet access division of France Télécom, charges €399 for the 8GB iPhone and €499 for the 16GB model in France. Dedicated iPhone airtime plans range from €49 to €149 a month depending on the number of bundled minutes and all include unlimited data usage.

Last month, Apple's network partners in the UK and Germany, O2 and T-Mobile, cut the price they charge for the 8GB model to boost sales. O2 cut the cost by £100 to £169, while T-Mobile went further, dropping its price to €99.

To further boost iPhone sales, Apple announced this week that Telecom Italia will begin distributing the iPhone in Italy later this year, while Vodafone will distribute it in 10 countries in Europe and Asia, including Italy.

Letting two operators distribute the iPhone in Italy marks a significant change for Apple, as its existing partners, AT&T Wireless in the US, O2 in the UK and Ireland, T-Mobile in Germany and Austria, and Orange in France, all have exclusive distribution deals.

In France, Orange has exclusive rights to distribute the iPhone for three years, said Pellissier, and that applies to all future iPhone models too.

Orange is exploring further deals with Apple, which has not yet named distributors for Spain or Poland, where Orange also has significant mobile operations. The companies are in talks over further iPhone distribution deals, and for more than those two countries, Pellissier said.

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