Apple Jumps on iPhone Talk

Apple (AAPL) shares jumped on a report that the iPhone has cracked the European market.

Confirming speculation last month, FT Deutschland, the German counterpart of the Financial Times, reported Wednesday that Apple has signed exclusive supply contracts with Telefonica's (TEF) U.K. unit O2, Deutsche Telekom's (DT) T-Mobile in Germany and France Telecom's (FTE) Orange.

Apple will get 10% of the monthly proceeds from calls and mobile data charges accrued by users in a revenue-sharing deal, according to the report.

Analysts say the deal sounds similar to the agreement between Apple and AT&T (T) here in the U.S. That five-year exclusive contract requires AT&T to share revenue over the customer's two-year pact. AT&T also pays Apple a bounty of about $200 for each new customer.

The agreements are in place in time for the all-important holiday buying season and are key to Apple hitting its goal of selling 10 million iPhones by the end of 2008.

The three exclusive contracts leave mobile phone giant Vodafone (VOD) shut out of the European iPhone sweepstakes.

"Vodafone was the front-runner because of its broad geographic coverage," American Technology Research analyst Shaw Wu wrote in a note on Wednesday. But Wu says a bidding war likely worked against Vodafone and in favor of specific carriers "tailored for specific regions and/or countries."

Industry observers expect that more iPhone agreements will be struck next year in Europe and Asia.

Apple shares rose $3.87, or 3%, to $131.44 in midday trading Wednesday.

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