Dive into OS X

After Apple made an exclusive five-year deal with AT&T for the US iPhone distribution rights, it has been widely speculated that a similar single company deal would be sought for the European market.

Given the fragmented nature of coverage in Europe across regions in comparison to the US, a sole distributor may end up causing a lot of problems. So, maybe Apple wants to make a deal with more than one distributor.

For the moment, Vodafone is the frontrunner to carry sole rights to the iPhone in Europe. Deutsche Telekom and France Telecom’s Orange are also in the running to bring the iPhone to Europe. Deutsche Telekom is better known as T-Mobile in the mobile space.

Apple has a preference for Vodafone, probably due to their coverage. Vodafone is one of the few cell carriers with a presence in almost all of Europe. Orange European coverage is significantly less than that of Vodafone. And Deutsche Telekom network is even more limited than that of Orange.

The deal between Apple and Vodafone is not signed yet. Apple wants Vodafone to take a guaranteed number of iPhones off their hands, but Vodafone doesn’t want that. and Vodafone does want the ability to subsidize the gadget and influence its retail price, which Apple doesn’t like.

What’s interesting about this possible partnership is that Vodafone runs a true 3G network, while Apple has designed the iPhone to run on a 2G network here in the States. The iPhone would likely have to be upgraded to support the faster data network. And, funny enough, 5 million units of the 2nd generation iPhone are rumored to begin shipping from Taiwan in September.

Apple has not yet announced a European launch date for the iPhone. The price is expected to be around 500 euros with a two year contract required.