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European carriers facing losses on first-gen iPhone
European iPhone carriers are facing “significant losses” on unsold first-generation iPhone stocks as they attempt to clear shelves for the arrival of the 3G model, according to The Times Online, which reports that both O2 in the UK and T-Mobile in Germany overestimated the number of iPhone units that would sell in Europe. Kathryn Huberty, an analyst with Morgan Stanley, said losses on the early model would be “significant” due to recent price cuts announced by both companies, despite the promise of monthly revenue from new iPhone customers. The article suggests the cuts are part of a move to empty inventories ahead of the 3G iPhone launch, which expected later this year. An O2 spokeswoman, however, said the price cut was “not a reactive move but part of a well thought out strategy of maximizing the success of the iPhone in the UK.” As we reported earlier, Orange, the iPhone’s carrier in France, is said to be in talks with Apple over similar price cuts for the iPhone; neither O2 Ireland or T-Mobile Austria yet appear to be involved in the proposed cuts.
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I don’t know why Apple even bothered selling a non-3G device overseas, where 3G is by now taken for granted. Especially in nations such as the UK, which all but skipped over pitiful EDGE and went straight to 3G as they upgraded their GSM networks.
You reap what you sow.
Posted by The Doctor on April 21, 2008 at 7:08 AM (PDT)