T-Mobile Germany to defend iPhone contract in court

T-Mobile is set to defend its exclusive rights to iPhone sales within Germany on Thursday, as a German court will hear arguments for and against the deal.

While the company is making an unlocked version of the phone available, it is appealing the injunction filed against it by Vodafone. If successful, the company will end sales of that model, and possibly file suit against its rival to recover damages.

T-Mobile is fairly confident that it will succeed in court, and believes its deal with Apple in Germany is within the country's laws. At issue are Apple's tight requirements that lock users into T-Mobile service and its long contracts.

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This way of doing business is hitting snags in Europe: in France, laws required it to be sold unlocked, and momentum is growing elsewhere to challenge Apple's exclusivity contracts, including in the US.

Apple's phone is also priced much differently than other phones within Europe. Most of the time, higher-priced units come unlocked, which make them usable on any network. Locked phones are typically heavily subsidized and/or free.

The phone is selling for £279 in the UK and €399 in Germany, which is on the high end of pricing for cellular phones there. Some say this pricing structure has a lot to do with Apple's struggles to sell the device in the region.

In two weeks, only 26,500 iPhones have been sold in England. This was far below the 100,000 expected by analysts. Price was the single biggest factor in holding back adoption. Data for other European markets were not available.

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