Apple's iPhone can only help rivals in Europe

Speculation has swirled for months over which European telecom operators will sell the iPhone, which combines the popular iPod music player and a Web browser.

In Germany, a source told Reuters last week it would be sold through Deutsche Telekom's retail outlets at an initial price of 399 euros.

Apple is expected to hand a deal to Spanish Telefonica's O2 UK unit, and France Telecom's Orange unit is expected to win a French deal, analysts say, though the companies have maintained strict silence about any deal.

Apple signed up top U.S. telecoms operator AT&T Inc. in an exclusive deal for at least two years to sell the phone in the United States. But earlier this month, Apple cut the U.S. price for the iPhone to $399 from $599.

Analysts said Apple is likely to benefit from its strong brand and dedicated followers when starting European sales, but a limited offering and signing deals with just one telecom operator per country would put a lid on its sales hopes.

"You need a brand, a product and a distribution to get market share. They got the brand, but the product is limited and distribution is rather limited," said Neil Mawston from Strategy Analytics.

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Mr Joseph Singer
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