Apple's U.S. blockbuster isn't a hit across the Atlantic. How will it fare elsewhere?When Apple's iPhone first went on sale in Europe six months ago, hopes were high that the device would be just as big a hit there as it had been in the U.S. But analysts are now raising concerns that the iPhone may not translate as well overseas, with sales sluggish in Europe because of the device's high price and strong competition from Nokia (NOK) and others. "Our research indicates that European shipments to date have been far below [expectations]," says analyst Richard Windsor of Nomura Securities (NMR).
As in the U.S., Apple (AAPL) cut exclusive deals in Europe so only one wireless carrier has the right to distribute the device in each country. It has three such contracts so far, with Britain's O2, France's Orange (FTE), and Germany's T-Mobile (DT). Strategy Analytics, a Newton (Mass.) consulting firm, estimates the three carriers sold a combined 350,000 iPhones in the fourth quarter last year, short of the consultancy's forecast of 500,000. It also estimates sales in the first quarter of 2008 dropped to 300,000. (There were 2 million iPhones sold last year in the U.S., where AT&T (T) is the sole carrier.)
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