SAN FRANCISCO -- Apple ( AAPL) has set the stage for the iPhone's debut on Nov. 29 in France, where the company's model of working exclusively with one service provider may meet resistance from regulators and consumer advocates. Apple said on Tuesday that French telecom company Orange will be the exclusive service provider for the iPhone. The deal gives Apple an entrée into Europe's three largest telecom markets. The iPhone goes on sale in France a few weeks after its debut in the United Kingdom and Germany. Analysts and investors have hailed the iPhone's arrival in Europe as an important way to introduce consumers across the Atlantic to Apple's brand and the style and features of its products. Many hope the enthusiasm for iPods and iPhones will lead consumers to purchase Mac computers. As in Germany, the 8-gigabyte phone will cost 399 euros in France, which is about $566 at the current exchange rate. In early September, Apple
reduced the price on the same model to $399 in the U.S. The iPhone's impact on Apple's finances won't become clear until the company releases its third-quarter results later this month. That will mark the first full quarter of iPhones sales. Investors have been hard pressed to estimate how much iPhone sales will affect Apple's profits in part because the company books each unit sale over a two-year period. Another complicating factor is AT&T's ( T) agreement to share the service revenue with Apple in exchange for the right to be the exclusive iPhone service provider in the U.S.
Apple, however, faces well-publicized hurdles to doing business in Europe. The company will battle local incumbents like Nokia ( NOK) whose multimedia phones operate on networks designed to provide faster speeds for Internet surfing and downloading images and applications. In France, Apple faces the additional burden of wrangling with regulators that may take issue with the exclusive relationship with Orange. Unlike the U.S. market where phones and service come as a package, Europeans are generally allowed to use the same phone with the service provider of their choice. Apple already faces scrutiny from European regulators who take issue with the fact that songs downloaded from iTunes are priced differently in different countries. In the past, regulators criticized Apple because iPods are the only devices that can work with iTunes. The late November launch date doesn't afford Apple much time to get the iPhone on Europeans' holiday shopping lists. The delayed debut may reflect the extended period of time that lawyers spent poring over legal and regulatory issues to ensure that they would not encounter resistance to the exclusive relationship with Orange. Apple shares were recently trading up $3.08, almost 2%, to $170.06, despite a second consecutive downturn in the broad market indices.