All Things Digital

Apple’s iPhone 3G arrived in stores today and was met by lines of enthusiastic buyers –dauntingly long lines. At Softbank Mobile’s flagship store in Omotesando, Tokyo, where iPhone monomaniacs first began camping out three days ago, the queue stretched for a half mile. “Mobile phones become Internet machines this year,” Softbank President Masayoshi Son said with almost Jobsian hyperbole before opening the store’s doors. “Today is a historic day.”

In New Zealand, where the deck chairs and sleeping bags began appearing Tuesday night outside the Auckland shop of Vodafone, the line included a customer who traveled to New Zealand from San Luis Obispo, Calif., simply to purchase the phone before it went on sale in any other country. Also in line: some folks with more nefarious purposes.

Back in the states, the sustainable-agriculture activists who dominated the queue outside Apple’s (AAPL) Fifth Avenue store earlier this week were quickly overwhelmed by less altruistic iPhone activators. No reason to break out the iPod white riot gear yet, though.

And, then there were the profiteers. For those not willing to spend the night squatting on the sidewalk outside an Apple store, the rate for a decent spot in line at many of Apple’s US retail stores was $50 or more. “I will have the rest of the family stay in line. I will have FOUR (4) extra spots so you don’t have to camp out,” read one ad on craigslist. “You give me $75 cash and you will have a spot in line.”

And, if you still happen to be waiting in line, describing exactly MacRumors has graciously posted an Apple Retail document what you have to look forward to.

Apple (AAPL) is expanding its iPhone empire with near Alexandrian initiative.

Today, the company struck an extensive deal with France Telecom’s (FTE.PA) Orange wireless carrier to distribute the device in more than 10 markets in Europe, the Middle East, Africa and the Caribbean.

Orange, which became Apple’s exclusive carrier partner in France last year, will soon sell the iPhone in Austria, Belgium, the Dominican Republic, Egypt, Jordan, Poland, Portugal, Romania, Slovakia and Switzerland, as well as the company’s African markets.

Interestingly, a few of these countries already have carriers with iPhone distribution agreements. It would seem then that Apple is indeed moving away from the exclusive iPhone distribution arrangements it’s been inking, as many suggested last week when Vodafone (VOD) and Telecom Italia (TI-A) both announced plans to bring the iPhone to Italy.

In any event, Apple’s deal with Orange will expand the iPhone’s reach to about 40 countries and will effectively quadruple its total addressable market. “Currently Apple’s total addressable market includes 153 million subscribers in six countries with AT&T (T), T-Mobile Germany and Austria, O2, and Orange,” Piper Jaffray’s Gene Munster observed in a research note today. “These announcements increase those numbers to 575 million subscribers in 42 countries, including recent agreements with Vodafone, SingTel, America Movil (AMX), Swisscom and Orange. … To give some context to these numbers, Apple sold 3.7 million iPhones in 2007 into a total addressable market of 148 million subscribers (or 3% penetration). Taking the recent carrier announcements into consideration, we are modeling for Apple’s penetration rate to remain at 3% in 2008 and double to 6% in 2009.”

As the anniversary of the iPhone’s market debut approaches, the Mac faithful are quickly succumbing to Apple (AAPL) Rumor Seasonal Affective Disorder, an ailment most often associated with the lead-up to Macworld.

Fueling that trend today is a memo, purportedly leaked from inside AT&T (T), instructing employees not to schedule any vacation between June 15 and July 12 to ensure sufficient staffing for “an exciting Summer Promotional Launch.” This, of course, is being taken as proof positive that the 3G iPhone will arrive at market sometime during that timeframe. And for good reason, AT&T issued a similar mandate last year prior to the iPhone’s official debut.

Meanwhile, Vodafone (VOD) and Telecom Italia (TI-A) said today that they’d both won contracts to bring the iPhone to Italy this year, the first time Apple has allowed two mobile carriers to distribute the device in a single country.

An interesting bit of news and one that lends some validity to recent reports that Apple is stepping back from the exclusive iPhone distribution arrangements it’s been inking to spur iPhone growth abroad. “Apple’s either turned a corner that they’ve had to turn, or that they’ve chosen to,” Technology Business Research’s Ezra Gottheil said of the Vodafone and Telecom Italia deals. “I don’t know if they prefer the exclusivity, and the revenue sharing that goes along with it, or just prefer to sell iPhones and grow their share of the [handset] market.”

T-Mobile’s $1,478 defeatured iPhone has been taken off the market as quickly as it arrived. A German court today dismissed an injunction won by Vodafone that had barred it from selling the iPhone only with a 24-month contract and a SIM lock that prevents users from switching to another wireless carrier.

T-Mobile met the news with a sigh of relief and promptly stopped selling the phone for 999 euros ($1,500) without a contract. Not that they were flying off the shelves at that price, although according to T-Mobile spokesperson Klaus Czerwinski, quite a few were sold. “It was hard to understand how somebody could buy it for that price,” he told ZDNet UK. “At the beginning I thought hardly any would be sold. It was a very expensive adventure.”

Arun Sarin’s low opinion of Apple’s iPhone is apparently so low that the Vodafone CEO doesn’t want anyone selling them–in Germany, anyway.

Vodafone Deutschland has managed to convince a German court to issue a restraining order against Deutsche Telekom’s T-Mobile unit prohibiting it from selling the iPhone in Germany. Seems Vodafone (which began selling an iPhone competitor, the Samsung-manufactured Qbowl, this month) is none too pleased about Apple’s policy of tethering the iPhone to one carrier per country–especially if it’s Telekom.

“It is not right that our clients can only get an iPhone by signing a long-term contract with Telekom,” Vodafone Deutschland boss Friedrich Joussen told Bild Zeitung. “We want a rapid judicial clarification to know if the iPhone should be available to all or only to some.” Joussen claims he’s not seeking an all-out ban on iPhones, just a ban on iPhones that don’t work on competitors’ networks. “We want it to be available to buyers without a mandatory calling plan,” he said in a statement. “If I had wanted to halt sales, I could have, but I didn’t.”

Given the criticism leveled at Vodafone following its failed 2004 bid for AT&T Wireless, it’s of little surpise that the company is vehemently denying reports that have it mulling a $160 billion offer for Verizon Communications.

Vodafone claims it has “no plans” to make such an offer. But as Sony president Ryoji Chubachi can attest, “no plans” can mean any number of things–perhaps even “carefully scripted leveraged buyout.” Certainly, Vodafone has to have kicked the idea around in the past. Acquiring Verizon Communications would give it full control of the telecom companies’ jointly held Verizon Wireless venture. And at the near-bargain basement price of $160 billion–after all, the American dollar has fallen to a 26-year low against the British pound. “Sure, $160 billion is a huge amount, but it’s not nearly as big as it used to be–if you’re paying in British pounds,” ZDnet’s Larry Dignan writes. “The dollar is a downtrodden currency these days. And Vodafone reports its financials in the pound. A Vodafone acquisition of Verizon is the equivalent of a Londoner taking a vacation in the U.S.–it’s a bargain.”

The battle for rights to bring the iPhone across the Atlantic appears to be winding down. According to current speculation, France Telecom’s Orange, Deutsche Telekom’s T-Mobile and Telefónica’s O2 will be given the privilege of distributing the device in France, Germany and the United Kingdom, respectively–though O2 denies it’s sealed the deal.

Apple had initially planned to sign a distribution deal with a single pan-European operator, leading many observers to conclude that Vodafone–Europe’s largest carrier–was the front runner to secure exclusive European rights to the iPhone.

It’s not yet clear why things don’t seem to be playing out that way, although it may be that Apple’s terms were a bit too onerous for Vodafone. Certainly, it’s not difficult to imagine Vodafone CEO Arun Sarin wincing over the AT&T-style arrangement that is rumored to give a portion of monthly subscription revenue to Apple.

One last point to make here: Contrary to current speculation, people close to the situation said European iPhones will not operate on 3G mobile networks of companies such as Vodafone, but on their slower 2.5G counterparts–just as they do in the U.S.