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iPhone Business Model Hits a Snag in France 332

Serhei writes "It seems like the iPhone might not be released in France by this holiday season, since French requires by law that all cell phones sold there must be obtainable in an unlocked version. Apple will not be able to do so, since it has launched with a 5-year exclusivity agreement with AT&T. That deal will probably require exclusivity worldwide to avoid grey-market imports. (In return for this agreement Apple receives a large share of AT&T's monthly revenues from iPhone subscribers.) If the iPhone falls through in France, the country can join Belgium and a potentially long list of other countries with unlocking laws, whose Apple fans will have to make do with other, less Apple-y phones. Note that there is currently no mention of the iPhone on the Apple France page."
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iPhone Business Model Hits a Snag in France

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  • Good news! (Score:5, Insightful)

    by OdinOdin_ ( 266277 ) on Saturday October 06, 2007 @05:38PM (#20882685)
    This is excellent, it means those EU countries which won't accept iPhone will have to churn out something thats a whole lot better, this is good news for consumers!
  • by analog_line ( 465182 ) on Saturday October 06, 2007 @05:51PM (#20882799)
    Yes, we know. This should frankly be all of Europe since the laws governing this thing are QUITE clear to us now, now that everyone and their brother on this site has given us quite the legal education with regard to cell phone unlocking in the EU. I'm sure Apple with either comply with the law or just not sell iPhones in jurisdictions where they feel they can't comply with the law. They generally don't act quite like Microsoft in the "I don't care what the law says, I'm MICROSOFT!" way. From the sound of it though, it seems no one in Europe will care, because they apparently don't want iPhones, they want phones that do X Y and Z that an iPhone doesn't do. Apple's so dead.

    Do we need 50 BILLION stories about this? "OMG IPHONE SUX, APPLE SUX 2 LOL" I'm expecting to be the next story down the pike. How many of you people are so stupid as to buy an iPhone, when anyone who bothered to look saw that it was locked into AT&T even in the months and month of preview hype.
  • by mark-t ( 151149 ) <markt.nerdflat@com> on Saturday October 06, 2007 @05:52PM (#20882803) Journal
    But couldn't Apple have just prevented this whole mess if they had charged like $1500 for the iPhone, and offered a $750 mail-in rebate for purchasers who signed a 5-year contract with AT&T?
  • Re:Good news! (Score:3, Insightful)

    by jcr ( 53032 ) <jcr@@@mac...com> on Saturday October 06, 2007 @05:56PM (#20882847) Journal
    good news for consumers!

    No, it means they can't get a product they want. It doesn't mean that they can get the product on different terms than the rest of the world can.

  • by Tim C ( 15259 ) on Saturday October 06, 2007 @05:58PM (#20882855)
    from the link, the "5 year exclusivity agreement with AT&T" is only for US Distribution.

    Yes, hence the comment about grey-market imports. It's unlikely that AT&T would be happy with the iPhone being sold unlocked in any country, as those unlocked phones could then be imported into the US, despite the exclusivity agreement.

    No, it wouldn't be as easy as if the iPhone was available unlocked in the US, and yes there are ways to unlock an iPhone, but that's not the point. If I were at AT&T and negotiated the deal, I'd have made damn sure that Apple were bound not to sell the iPhone unlocked anywhere, to make it that bit harder to obtain an unlocked one. Remember, you don't have to make it impossible, just hard or risky enough that that people can't be bothered.
  • by jcr ( 53032 ) <jcr@@@mac...com> on Saturday October 06, 2007 @05:59PM (#20882857) Journal
    In the end, the iPhone has turned out to be a real disaster.

    It sold a million units in 75 days. How can I make my next product a "disaster" like that?


  • by suv4x4 ( 956391 ) on Saturday October 06, 2007 @06:24PM (#20883057)
    Only months from now, the other companies competing on the cellphone market will release their brand new iPhone clones (Nokia, looking at you).

    What is the iPhone? It's just a phone with nice easy interface on a large touchscreen. It's not terribly hard to copy, nor is it illegal.

    If Apple decided not to sell in France and other countries because it can't have 100% exclusivity with one provider, the other companies will fill their niche just fine. The only loser is Apple themselves.
  • by erroneus ( 253617 ) on Saturday October 06, 2007 @06:26PM (#20883069) Homepage
    It's not a disaster yet. I have at least two users at the office with iPhone and they are 'in love' with them for the moment. One even converted to Mac in the process. They are "forgiving" of all the shortcomings encountered thus far. Somehow the "coolness" outweighs the negatives for the moment.
  • by v1 ( 525388 ) on Saturday October 06, 2007 @06:43PM (#20883165) Homepage Journal
    That's actually a very good idea for them. The big argument right now is that Apple can't release an unlocked phone in another market due to grey market import of unlocked phones. Soooo, release it locked by another carrier in a new market. In this way the two markets do not compete, and yet consumers in both markets can obtain and use the product.

    This is probably Apple's original plan. A year from now we are very likely to see the iPhone for sale in 1/2 dozen markets, each locked to a single provider in that market.
  • by Anonymous Coward on Saturday October 06, 2007 @06:44PM (#20883171)

    But couldn't Apple have just prevented this whole mess if they had charged like $1500 for the iPhone, and offered a $750 mail-in rebate for purchasers who signed a 5-year contract with AT&T?
    Yes, but it would make more sense for them to just sell it with a five year contract. The mail-in rebate thing wouldn't add anything other than to put people off buying them.

    The important thing is that they can't prevent people using the phones on other networks. That isn't compatible with selling them with a five year contract that gives them access to a particular network, provided that they don't prevent people using the phones on other networks. Get it?
  • by zuki ( 845560 ) on Saturday October 06, 2007 @06:50PM (#20883219) Journal
    ...what are the terms of the deal that made Apple so giddy about 'locking in' with AT&T for FIVE YEARS!!!

    The argument is that Apple obviously has legal counsel who foresaw all of these problems (risk of class action, being made illegal in certain countries, etc...)
    Yet they do not have any problem doing this for what (in hardware evolution time) is several lives long, and they are basically risking everything on this gamble.

    What could it be that made the pot so sweet that they went with this deal on a debut product?

    And on the opposite side of the coin, what could have been so incredibly bad about offering the phone unlocked with a SIM card slot
    that they, -who pride themselves in public for being so 'open'- did not see that as a viable option?

    Do they act so arrogant that they don't even want to please all of the international travelers who swap SIM cards
    every time they arrive in a new country? Someone, please drop some science on us. As it is, it makes no logical sense.

    (Oh yeah, and BTW Steve, if you happen to read this, just email me the 411 directly...! KTHXBYE)

  • Re:Ahhh! (Score:3, Insightful)

    by crankyspice ( 63953 ) on Saturday October 06, 2007 @06:56PM (#20883253)

    They made their mistakes long ago with Apple III/Lisa and/or other lines and have done nothing but win consumers over since then.

    ...With the IIvx, and the Newton, and the clone licensing program, and the Performa line, and the PowerBook 5300, and... ;)

  • You'd think (Score:3, Insightful)

    by FranTaylor ( 164577 ) on Saturday October 06, 2007 @06:59PM (#20883283)
    With all the corporate-induced environmental disasters, wars, etc. in the world, that people would find something more important to get excited about than the terms and conditions for a cell phone.
  • by lp-habu ( 734825 ) on Saturday October 06, 2007 @07:12PM (#20883381)

    In the end, the iPhone has turned out to be a real disaster. It's Steve Jobs' Segway. He signed the deal with Satan himself (AT&T), and done onerous things which has absolutely killed all the fan base that Apple spent years building up.
    Wow! Your insight has provided you a golden opportunity to get rich! All you have to do is sell Apple short, sit back and wait for the money to roll in!
  • Re:Good news! (Score:5, Insightful)

    by timmarhy ( 659436 ) on Saturday October 06, 2007 @07:36PM (#20883517)
    what are you dense or something? apple isn't holding france to ransom over the iphone, apple is missing out on sales in france. you have the issue back to front my friend.
  • Re:Good news! (Score:2, Insightful)

    by ZoneGray ( 168419 ) on Saturday October 06, 2007 @07:39PM (#20883545) Homepage
    Good news for consumers... unless they're in Europe and want an iPhone.

    Let me get this straight.... you REALLY think such regulation would prompt somebody to make a better phone than Apple?

    Why would they?

    They no longer have to!

    If I were a phone maker, I'd say, "Thank you for locking out our toughest competitor."

    Score another one for corporations who scam consumers into thinking regulation is good for them. Pay attention, this is how it's done folks.
  • by moosesocks ( 264553 ) on Saturday October 06, 2007 @08:29PM (#20883869) Homepage
    Oh come now. Although I don't want this to turn into a political flamewar, France doesn't have any sort of pervasive hatred toward Americans.

    Yes. France disagreed with the U.S. about Iraq (and yes, even though their reasons for doing so weren't the most honorable, it's fairly safe to say at this point that they were on the "right" side of the debate). However, this was a criticism of a matter of foreign politics and policy, and not some sort of personal vendetta against the entire population of America (especially those evil industrial design firms in California!)

    It was the US who took the issue way too far. Even though it was a joke, serving "freedom fries" in the senate cafeteria was terribly crass.

    Surprise! The world does not hate Americans by default. Most of them don't approve of what the government's doing, but neither do 70% of Americans these days.
  • by AHumbleOpinion ( 546848 ) on Sunday October 07, 2007 @12:18AM (#20885035) Homepage
    "Designed in the USA" is probably hurting them worse in France.

    Actually Apple is popular in France, major executives have been French.

    You might also check up on current events, when French and German citizens got to vote the results turned out a bit different than what the mass media wanted to portray. Candidates friendly to the US won.

    When I was in Paris last year I was treated very well. Even though my French language skills are nearly non-existent. Disagreeing with a government's policy decision does not translate into a population hating companies or citizens.
  • Re:Good news! (Score:3, Insightful)

    by driftingwalrus ( 203255 ) on Sunday October 07, 2007 @04:04AM (#20886067) Homepage
    Regarding new firmware bricking an unlocked iphone - tampering is the wrong word. You may have modified it, altered it or changed it. Tamper implies a level of deception or inappropriate behaviour. The phone is your property, and is not even subject to a carrier subsidy. When you unlock it, you are not tampering with it. You are modifying it. In actuality, you are *repairing* it. Having it locked to one carrier is brain damage. You are simply correcting the brain damage.

    I am aware of an effort underway to sue apple for bricking unlocked phones, and I say bully to them. There needs to be more of this happening. Manufacturers are not used to producing smart devices, products which have capabilities far exceeding anything they intended. To date the gut reaction has been to stop people from exploring this new technology. Once we can defeat this anachronistic way of thought, we will truly begin to discover the wonders that this equipment can carry out.
  • Re:Viva la france (Score:2, Insightful)

    by JackMeyhoff ( 1070484 ) on Sunday October 07, 2007 @04:29AM (#20886187)
    This should be a law at the European wide level just like number portability. Device portability :) I see no reason to give Apple money until they comply. What is the point of complaining then going out and giving them money?
  • Re:Good news! (Score:4, Insightful)

    by BorgDrone ( 64343 ) on Sunday October 07, 2007 @05:08AM (#20886333) Homepage

    Because they limited the ability of business to make money on a product;

    Nokia doesn't seem to have a problem making a profit selling unlocked phones, neither does SonyEricsson, Samsung, LG, HTC etc. Apple could have sold way more phones if it had been available worldwide, unlocked and without a plan, just like e.g. the iPod.

    And they should have released in Europe first, by the time the iPhone was released in the US, it was high-tech for the US market, but not so much for the EU market. by the time it arrives in Europe, it's outdated. Sure it has a nice user interface, but it misses a lot of the features people expect, like UMTS or HSDPA.
  • by Anonymous Coward on Sunday October 07, 2007 @07:09AM (#20886781)
    ..."protecting" the consumer from being able to buy an iPhone at all. Total Newspeak.

    I'd rather be "at the mercy" of Apple and have the option to choose what restrictions I'll submit myself to than have a monolithic bureaucracy (however you want to spin it) decide for me.

    But then, that's always been the difference between freedom and socialism.
  • by PastaLover ( 704500 ) on Sunday October 07, 2007 @09:58AM (#20887563) Journal
    The consumer protection laws are meant to foster innovation and encourage competition. This kind of phone/provider tying is bad for competition and probably does a lot to keep phone prices artificially high. It's got little if anything to do with "socialism".

    BTW, it's Apple's choice not to enter the European marketplace, not the EU's choice. There's no reason why they couldn't play by the same rules other providers are. Well, except they might have locked themselves in with AT&T.

    Also, while TFS mentions Belgium I suspect Apple not entering this particular market has more to do with the lack of flat rate internet subscription plans than with the consumer protection plans. Luckily this is changing (slowly) but I doubt the iPhone would really work down here right now. Companies make boneheaded moves all around the world it seems. Surprise! :-)
  • by Dion ( 10186 ) on Sunday October 07, 2007 @10:04AM (#20887605) Homepage
    I'm sorry you have become so turned against the idea that governments can be on the side of the people.

    A free market is not a goal in itself, just like unlimited freedom of citizens isn't a good idea either.

    It's a good idea to limit the citizens freedom to commit murder, just like it's a good idea to limit the freedom of companies to pollute and corrupt the marketplace.

    Businesses cannot be allowed to rule the marketplace without oversight as it's very profitable for the monopolist to corrupt the market and keep other competitors out, this leads to less competition and less choice for the consumers.

    Even if a company cannot get a monopoly it can still enter into price fixing agreements and again the market and customers lose.

    There are tons of situations where companies just don't do the right thing and the market forces are too weak to steer them straight.

    Saying that any regulation is always worse than no regulation is naive in the extreme.

    Our laws enable us to use any phone on any network and it allows us to change operators easily without changing phones, that has led to very low prices and a wide selection of phones, saying that it's worse to have more competition and lower prices at the cost of a little regulation sounds downright silly.

    A government isn't totalitarian just because it regulates a market, it's a much bigger problem if it started passing laws governing what citizens could do in the privacy of their own home.
  • by SerpentMage ( 13390 ) <ChristianHGross&yahoo,ca> on Sunday October 07, 2007 @10:17AM (#20887701)
    Normally I would agree on most things with respect to competition being better in the US. HOWEVER, with respect to cellular phones the US has its head up its own arse. The telcos in the US just don't get it, and neither does the government. Year after year the US is behind the world's market and why? Simple because of point 1.

    Europe, and not just the EU got this one right. They understood that to grow the pie you need to be open and allow choice. You need to allow people to choose whatever phone, and plan they want.

    With respect to profit, dude, you are really wrong here. The North American telcos when compared to cell phone business only are not that large. If you look at the bottom lines Voda phone, Orange, T-Mobile are doing pretty well.

    Now with respect to plans and getting good ones. Well, you are taking an extremely biased perspective.

    For example the following is considered a plus (T-Mobile)
    * No nationwide long-distance or roaming charges (BTW this is free throughout Europe)

    And why do people have to pay for incoming calls? And what about roaming charges outside of the US? Compare how much you would pay if you were to travel from the US to Canada. Then very quickly you would see how expensive things get.

    My point is that you should get to know both sides of the issue before saying Europe does not get it. Again while I normally do think North America is ahead in technology, when it comes to cell technology North America is behind the times...
  • by mattcasters ( 67972 ) on Sunday October 07, 2007 @02:23PM (#20889501) Homepage
    Where is that picture on which Donald Rumsfeld shakes hands with Sadam Housein? Oh, here it is! [oilempire.us]
    By the way, that picture, taken out of its original context is just as much a troll as what you posted.

    My point still stands. You know what the first victim is in every war.
  • What myth? (Score:3, Insightful)

    by Per Abrahamsen ( 1397 ) on Sunday October 07, 2007 @02:54PM (#20889765) Homepage
    >I'm not really sure why this myth continues to propagate. iPhone has a SIM slot.

    The slot is not of much use when the phone is locked to a specific SIM card. Which is what the GP complained about. Switching to a local SIM card when you come to a new country will of course save you a lot of money, when the phone will refuse to operate. But keeping your phone turned off will save you the same amount, and be much simpler.

Make it myself? But I'm a physical organic chemist!