Apple iPhone Sales Rise In France After Exclusive Carrier Contract Ends

By Joseph F. Kovar, CRN
November 23, 2009 2:58 PM ET

The decision by market regulators in France to break the exclusive iPhone contract in that country has led to a significant increase in business for Apple, a result that could foretell changes in the U.S. market should AT&T lose its exclusive iPhone contract.

The business news site MarketWatch reported on Friday that since France forced Apple to open its iPhone distribution, Apple's iPhone share of that country's smartphone market has grown to 32 percent in the latest quarter, compared to 21 percent in the previous three months.

The move to open the iPhone market to competition came about in April after Bouygues Telecom and Vivendi's SFR complained to regulators about Apple's exclusive contract with France Telecom's Orange division signed in 2007, MarketWatch reported.

Meanwhile, Orange earlier this month also started selling the iPhone in the U.K., and on the first day of sales sold 30,000 units, MarketWatch reported.

Vodaphone in September said it will start providing service for the iPhone 3G and iPhone 3GS in England and Ireland starting in 2010.

AT&T currently has the exclusive iPhone contract for the U.S. market, but the company acknowledges that that exclusivity is not guaranteed going forward.

Ralph de la Vega, president and CEO of the wireless unit of AT&T, last month brushed off concerns that AT&T might loose its exclusive contracts with the Apple iPhone by saying it would not have a major impact on his company.

de la Vega said that the iPhone accounts for only about one-third of AT&T's gross additions to its wireless subscriber base, but that it has a portfolio of other products that will drive growth in the future.

Outsiders have been calling for Apple to end its exclusive iPhone contracts with AT&T, noting that such a move could mean a quick and significant boost to the iPhone's share of the smart phone market.

A podcast of de la Vega's comments can be found by clicking here.

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