AppleSurge in iPhone sales in Europe could compensate for slow sales in China

Surge in iPhone sales in Europe could compensate for slow sales in China

iPhoneGood news is all set to knock Apple’s doors again. Even though the company may not have sold much of their iPhones in China, apparently it is claimed that Apple iPhone sales are all geared up to pick up in Europe as distribution broadens.

The end of exclusivity supposedly has already generated a huge jump in market share for the popular handset in France and observers are of the opinion that the trend is about to replicate itself in the U.K. In France, Apple’s iPhone was initially only obtainable through France Telecom unit Orange, which purchased complete rights to the device in 2007. But competitor operators Bouygues Telecom and SFR, a unit of Vivendi, protested to the country’s competition regulator and were finally permitted to distribute it also.

Since April, the iPhone can be bought through the three major French operators. The broadening of the distribution has augmented Apple’s value market share to around 32% in the latest quarter from about 21% just three months before, as per a research from Bernstein.

Pierre Ferragu, analyst at Bernstein, commented, “The expansion of iPhone distribution has clearly benefited Apple, helping it to more than double sales in three months.”

In spite of the dearth of data accessible from Apple and operators, other analysts had arrived at similar conclusions. In a latest report, Morgan Stanley approximated that the iPhone market share in France augmented by roughly 17% successively in the third quarter. Consequently, France is now claimed to be the leading market for the iPhone in Europe as more than 6, 00,000 units were sold in the third quarter. This was according to Carolina Milanesi, research director in the mobile device practice of Gartner.

Apple posted a 40% boost in iPhone unit sales in the recent quarter to 7.4 million, thereby rising its worldwide market share in the quarter to about 2.6% from 1.9% as per estimates by Chris Versace of Think 20/20 Research. The U.K market is said to be affected by the recent surge in demand in France for iPhones.

Strategy Analytics analyst Neil Mawston, remarked, “Exclusivity in France ended in April. Our numbers show that shelf share tripled and market share doubled quarter on quarter. Given that the U.K. market is pretty similar and the brand strong there, yes, you can extrapolate that.”

Gavin Byrne, an analyst at research house Informa Telecoms is of the opinion that that the release of the 3GS model in July and the concurrent drop in cost of the original iPhone, probably also promoted a raise in demand. He believes that that the possibilities for share gain in the U.K. market is claimed to be considerable, particularly because of its fragmentation.

While other leading European mobile markets such as France and Germany apparently have only three major players, the U.K. has five: Telefonica’s O2, which is alleged to be the original exclusive distributor of the iPhone; Vodafone, which may begin selling it in early 2010; Orange, which commenced offering it earlier this month; Deutsche Telekom’s T-Mobile and Hutchison Whampoa’s are the other players.

Orange and T-Mobile have lately settled to tie up their U.K. operations. In France, the contract with Orange meant that when the iPhone released, it was obtainable to about 47% of subscribers. In contrast, in the U.K., the O2 affiliation meant it was available to only about 29% of subscribers.

Orange claims that it has sold about 30,000 iPhones on the first day of U.K. sales. A powerful start in European countries where distribution was formerly restricted could cheer up investors anxious about preliminary unsatisfactory demand in China, where Apple sold only about 5,000 iPhones since in the first three days following the release on Oct. 30.

After France and the U.K., an augment could well happen in Germany, where only Deutsche Telekom’s T-Mobile distributes the device, and Spain, where Telefonica remains the only distributor.

Back in the U.K., the crucial issue for Orange and Vodafone is how to race with O2 bearing in mind that the device is the same.

Strategy Analytics’ Mawston, quoted, “If there’s going to be a price war it’s going to be a minor war. My sense is that Apple keeps a pretty tight grip on prices and they’ve made it clear they want to maximize profit revenue and services. Operators wanting to get it may have committed, whether legally or not, to not eroding pricing too much.”

Meanwhile Orange Boss Olaf Swantee is anticipating the device may encourage subscribers to maximize the use of data services like mobile television. In France, he is of the opinion that over 40% of all its mobile TV sessions are conducted on an iPhone.

With this kind of augmented sales, iPhones could certainly be on a roll in Europe.

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