Apple's Non-Exclusive iPhone Deals Extend Reach

Orange's announcement of a plan Friday to deliver iPhones to 10 more countries is the latest in a flurry of non-exclusive deals in recent weeks between Apple and non-U.S. service providers to deliver the handsets, raising questions about AT&T's exclusive five-year iPhone deal with Apple.

Orange, a subsidiary of France Telecom, said Friday it will sell iPhones in Belgium, the Dominican Republic, Egypt, Jordan, Poland, Portugal, Romania, Slovakia, Switzerland and Austria, the last of which is a country where Deutsche Telekom previously had an exclusive contract with Apple to sell the iPhone. Orange will also market iPhones in parts of Africa, it said.

Orange will also compete with UK-based Vodafone in selling iPhones in Egypt and Portugal, while Vodafone and Telecom Italia will battle as iPhone hawkers in Italy, according to recent reports. Apple has also inked deals in recent weeks with SingTel, American Movil and Swisscom.

The competition Apple seems to be encouraging in non-U.S. markets has some analysts wondering if the exclusive deal with AT&T to sell iPhones in the U.S. has little chance of being re-upped once it expires.

All of the recent activity by Apple adds up to what one analyst describes as a quadrupling of the Cupertino, Calif.-based computer and consumer electronics firm's total addressable market.

"Currently Apple's total addressable market includes 153 million subscribers in six countries with AT&T, T-Mobile Germany and Austria, O2, and Orange," Piper Jaffrey analyst Gene Munster wrote in a recent report. "These announcements increase those numbers to 575 million subscribers in 42 countries including recent agreements with Vodafone, SingTel, American Movil, Swisscom, and Orange.

Munster believes Apple will have iPhone distribution in East Asian countries firmly in place by 2009 and as a result of that development and the recent European carrier deals, projects the company will double its penetration rate for the handsets a year from now.

"To give some context to these numbers, Apple sold 3.7 million iPhones in 2007 into a total addressable market of 148 million subscribers (or 3 percent penetration)," Munster writes. "Taking the recent carrier announcements into consideration, we are modeling for Apple's penetration rate to remain at 3 percent in 2008 and double to 6 percent in 2009."