The iPhone divide

Apple was in typical self-congratulatory spirits this week, boasting sales of 4m iPhones since they hit the stores last summer. Having surpassed all expectations, CEO Steve Jobs will no doubt feel satisfied to have proved his detractors wrong.

Before he gets too carried away, though, he might reflect on just how lopsided those sales look. Around 3.4m went to AT&T customers in the US, leaving just 600,000 to split between O2 UK, France Telecom and Germany’s T-Mobile, the European distributors.

Sure, the iPhone was introduced to the US four months before it went on sale in Europe. And yes, the US is more populous than the UK, France and Germany combined. No one could realistically expect parity. But the gulf between the two regions seems to have widened over the Christmas period.

It’s no surprise, really. Americans are used to splurging their savings on the latest gizmos. Europeans, on the other hand, are used to getting the newest and most stylish handsets at heavy discounts. Chances are most can’t quite believe how much their service providers want for the iPhone.

That’s not all. The iPhone has had a lot of bad press because it doesn’t work on Europe’s fastest mobile networks. Customers have to use WiFi – a short-range wireless technology – to get maximum value from it, and WiFi coverage is not pervasive. The alternative is frustratingly slow and costly.

This is no different in the US, but AT&T’s highest-speed mobile network is unavailable across much of the country. Most customers don’t miss it because they’ve never used it, and so they’re happier to make do with the occasional bout of WiFi.

Of course, the quicker development of mobile technology in Europe also means the region has more iPhone rivals. Vodafone UK launched some new handsets over the Christmas period that allow fast web surfing and data downloads across most of the country. SFR did the same in France. Both providers are offering competitive monthly deals, charging for mobile data usage at flat rates.

Amusingly, the Financial Times, a UK newspaper, recently published a letter from a disgruntled iPhone customer that lampooned some of O2’s optimism about the device:

“I would dearly love to use my phone more for surfing the internet away from WiFi,” wrote the customer, “but frankly the current costs are prohibitive. From O2’s point of view, I am afraid the iPhone is nothing more than a temporary blip in the usage charts.”

Clearly, an iPhone that works on the fastest, most cost-efficient mobile networks is needed essentially on one side of the Atlantic. Apple should provide more guidance on when this will become available. But other measures need to be taken. Apple should drop its pompous claim to a share of airtime revenues – which turns the whole net neutrality argument on its head – and give its European partners the financial freedom to subsidise handsets. Only then will it realise the true international potential of the iPhone.