iPhones poised to hit Britain

iPhones poised to hit Britain
Tue Nov 6, 2007 12:25pm EST

By Kate Holton

LONDON (Reuters) - The most eagerly awaited gadget of the year, Apple's iPhone, goes on sale in Britain and Germany this week to test European appetite for the mobile phone that thousands queued for in the U.S. in June.

Consumer electronics company Apple, mobile phone retailer Carphone Warehouse and mobile operator O2 will open stores around 6:00 p.m. British time on Friday for just four hours for a hoped-for stampede for the touch-screen phone.

In Germany it will be sold by Deutsche Telekom's mobile phone division T-Mobile. It will go on sale in one Telekom shop in Cologne just after midnight on Friday morning and will then roll out across the country.

Hundreds of extra staff have been taken on, and companies are hoping Apple's combined iPod music player, Web browser and camera will catch the public imagination in time for Christmas.

O2 UK, owned by Spanish telecoms group Telefonica, secured the exclusive network deal for the phone in Britain and expects the device to be its fastest-selling handset yet, with around 200,000 selling by the three outlets by Christmas and the New Year.

Carphone Warehouse, Europe's top independent mobile phone retailer, said last week that it could sell up to 10,000 in the first day. T-Mobile has not given any sales forecasts.

Not all analysts are convinced.

Most handsets in Europe are subsidized in return for customers signing up to contracts lasting perhaps 18 months or two years, but iPhones will cost 269 pounds in Britain on top of an 18-month contract costing a minimum of 35 pounds per month.

In Germany it will cost 399 euros (278.4 pounds) with a two-year minimum monthly fee of 49 euros. Apple slashed the iPhone price in the United States by $200 (96 pounds) to $399 in September.

Unlike many other phones, it will run on enhanced second generation (2G) networks, rather than the faster 3G system, though it will automatically switch onto speedy local wireless, or wifi, networks where these are available.

Gartner analyst Carolina Milanesi said the unsubsidized price could put some people off in Britain, but she still expected it to be one of the most wanted consumer electronic products this Christmas.

"The 200,000 number O2 referred to as a target market is quite safe," she said. "We think 350,000 iPhones could be sold in the first two months."

Analyst Thomas Friedrich from UniCredit's German unit HVB said he did not expect it to be as popular as it has been in the United States and said it would be more geared towards those willing to pay for a luxury item in Germany.

Milanesi said she thought the iPhone would spur other manufacturers to improve their user interface, and on Monday a new competitor emerged.

Google, the world's leading Internet company, said on Monday it would offer a software system to make the Internet work as smoothly on mobile phones as it does on computers. Google-based phones are due to appear in the latter half of next year.

(Reporting by Kate Holton, Nicola Leske in Frankfurt)