Apple ramping up iPhone 2008 rollout: 26 countries and counting

The long wait to find out which countries will get the iPhone next ended dramatically over the past week with a flurry of announcements that should have the device on sale in 26 more nations by year's end.

Not that you can't buy an iPhone almost anywhere in the world already. But those unlocked iPhones are unauthorized -- purchased primarily in the United States for resale in places with demand but no supply.


In its past several earnings conference calls, Apple CFO Peter Oppenheimer has described this worldwide "grey market" not as a problem for Apple but as an opportunity, a demonstration of extraordinary demand for the product.

While Apple makes a profit from iPhones that end up in the grey market, it would make more by selling them to customers in those countries via a cellular partner along with a service contract.


Perhaps that's why we're seeing such a large number of countries on Apple's iPhone schedule – the longer it takes Apple to set up its international iPhone distribution network, the more money it loses from the lucrative revenue-sharing deals it makes with the carriers.Depending upon how the iPhone is priced, grey markets may continue to thrive in many places. But a legitimate iPhone should take back the bulk of sales in most countries.

So just who is getting the iPhone this year? Canada made the list when Rogers Communications announced its deal with Apple last week.

On Tuesday U.K. -based Vodafone – the world's largest mobile carrier – said it would be selling the iPhone in 10 countries by the end of 2008.

And yesterday America Movil SAB, Latin America's largest wireless carrier with 37 percent of the market, announced plans to "bring the iPhone to its Latin American operations," which includes 15 countries and Puerto Rico.

Expect the list to keep growing, as reports of several unconfirmed deals also surfaced this week. Yesterday the Swiss newspaper Le Matin said that mobile carrier Swisscom had forged a deal with Apple to bring the iPhone to Switzerland this summer.

And France Telecom CFO Gervais Pellissier hinted during a conference call that his company, owner of the Orange network, is in talks with Apple to sell the iPhone in countries besides France. Two prime suspects are Spain and Poland, but Pellissier said the discussions extend to more than just two countries.

On top of all that Apple also announced that in Italy, Vodafone will not have exclusive rights to the iPhone, breaking its policy of one country, one carrier. Vodafone will share the privilege with Telcom Italia TIM. Some suspect the Australia deal also may not be exclusive, but that is not yet confirmed.

But the Italy situation alone marks a major shift in strategy for Apple. Here we have proof that -- at least with the iPhone -- Apple is willing to break with its traditional stubbornness and pursue whatever business model works best in a given situation.


What we don't know is how much (if any) shared revenue Apple will get in a country with multiple carriers. Until now, Apple had used the exclusivity as a bargaining chip to obtain a percentage of revenue from the service contracts.

We also don't know if this new willingness to experiment means Apple itself will start selling unlocked versions of the iPhone, at least in countries where Apple considers it practical.

What we do know is that Apple's global iPhone strategy has kicked in to high gear. The countries lined up so far constitute a huge chunk of the worldwide market, which should accelerate sales substantially.

And then factor in the impact of the 3G iPhone everyone expects Apple to announce next month. Whoa.