Apple's iPhone floods France

Apple Inc. iPhone hits shelves in France at special late openings in 12 select Orange cell phone stores - including its brand-new boutique on Paris' most famous avenue, the Champs-Elysees.

Photo: Apple's iPhone floods France

"It's quite expensive but it's worth it," said Philippe Amardielh, 20, waiting in line since 9:30 a.m. to claim the first iPhone in Paris when doors open at 6:30 p.m.

"I've already prepared my Mac to synchronize everything - my contacts, my music, my favorite Internet sites," he said.

Didier Lombard, head of Orange parent France Telecom, said he hopes to sell as many as 100,000 of the cult handset by the end of the year, undeterred by its high price tag.

The iPhone, which combines a cell phone with an iPod media player that also can wirelessly access the Internet, has shaken up the "smart phone" business and set other manufacturers scrambling to add features.

Named invention of the year by Time Magazine for its design, pioneering software and because it's "touchy-feely," the iPhone has won over users since it debuted June 29 in the United States.

Apple has sold over 1.4 million iPhones already and hopes to sell 10 million in 2008, helped by its launch in Europe, then in Asia next year. On Nov. 9, when the iPhone made its European debut, more than 10,000 were sold in Germany alone.

Lombard hopes the popular handset will bring new customers into his stores.

In a challenge to Apple's strategy thus far to offer its iPhone through an exclusive mobile operator for each region, Orange is selling unlocked handsets to comply with French consumer law.

Apple's model has already been thwarted by a Hamburg court, which forced Germany's Deutsche Telekom to start selling an unlocked phone via its T-Mobile unit after a challenge from rival Vodafone Group PLC.

In France, the unlocked handset will cost €649 (US$965.32), much cheaper than the €999 (US$1,485.91) T-Mobile is charging. The cost of unlocking the handset is €100 (about US$149).

Orange is also offering the iPhone for a discounted €399 (about US$593) - the same price as Germany - with a two-year subscription plan.

Companies routinely offer phone discounts to customers who sign up for lengthy contracts.

In the United States, AT&T Inc. sells the 8-gigabyte iPhone at US$399, after slashing the price by a third within two months of the gadget's debut from an initial $599. Consumers in Britain, where the iPhone is sold by exclusively by O2 - pay 269 pounds (€375, US$556). European price tags include value-added tax.

In France, Orange said it is offering monthly contracts varying from €49 to €119 (about US$73 to US$177) with the discounted model. All of them offer visual voicemail - allowing consumers to choose the messages they listen to - and unlimited access to e-mail and the Web, Orange said.

The iPhone goes on sale nationwide on Thursday.

Flouting the exclusive deal between Apple and Orange, a French Web site has been offering the iPhone since Monday tied to contracts with Orange's competitors.

On phoneandphone.com, an iPhone with a Bouygues Telecom contract is priced at €299 (about US$445), undercutting Orange. The site had been selling the iPhone previously, but following legal threats from Apple it agreed at the end of October to hold off selling the phone until it came on to the European market.

Apple did not respond to a request for information, but Orange spokesman Louis-Michel Aymard said the company is prepared to take legal action to ensure the exclusive operator agreement is respected.

Customers who put SIM cards from Orange's rivals into an unlocked iPhone run the risk of not being able to use all of its features or seeing their phones melt down after software updates.