Apple iPhone Storms Europe

Apple Inc. will start selling its popular iPhone smart-phone in the U.K with the Spanish-owned service provider O2, bringing the firm's highly-coveted device to Europe for the first time.

The 8-gigabyte handset will go on sale in the U.K. on Nov. 9 for 269 pounds ($536), including tax, Jobs said today at a news conference in London.

The touch-screen mobile phone, which combines Apple's popular iPod music player, a video player and Web browser, will be sold in O2 stores, Carphone Warehouse and Apple retail and online stores.

We're thrilled to be partnering with O2 to offer our revolutionary iPhone to UK customers, said Steve Jobs, Apple's CEO, in a statement. US iPhone customer satisfaction is off the charts, and we can't wait to let UK customers get their hands on it and learn what they think of it.

Apple is expected to hand a German iPhone distribution deal to Deutsche Telekom's T-Mobile and a French deal to France Telecom's Orange later this week.

Jobs declined to discuss further launches in Europe.

Newspapers have long speculated that O2 was so eager to win the iPhone deal that it was prepared to hand over as much as 40 percent of revenues for the unsubsidized handsets to Apple . Jobs denied the suggestion at a London news conference.

It wasn't an economic choice, he said. It was a cultural choice.

The O2 contract packages range from 35 to 55 pounds ($70-$100) a month for services that include unlimited access to the UK's largest single public Wi-Fi network, the operator said, covering over 7,500 cafes, restaurants, airport lounges, pubs and other locations across the country.

Over an 18-month contract, British consumers face a minimum cost of 899 pounds for the iPhone and call packages.

The slightly higher prices come from the addition of higher British taxes, Jobs said.

In the US, Apple slashed the price of its $599 model to $399 last week, sending its stock falling on market concerns that sales were slowing. The music functionality of the phone also raised fears that its own iPod music devices would compete for audio hungry consumers.

Contrary to fears with potential cannibalization, American Technology analyst Shaw Wu told clients yesterday, iPhone sales have regained momentum. For the September quarter, we are now forecasting 900,000 units (from 770,000 and guidance of 730,000).

As of Sept. 10, Apple and AT&T, the firm's sole U.S provider, had sold more than 1 million iPhones since its introduction on July 1. Customers need to sign a two-year contract with AT&T, the largest mobile-phone provider in the U.S.