Hamburg court re-locks iPhone in Germany

A German court has ruled that T-Mobile should not be forced to sell an unlocked version of Apple's iPhone, rejecting a complaint by rival Vodafone that led to an injunction last month.

Vodafone and smaller network Debitel had complained to the Hamburg District Court that it was not legal to tie a phone to a single carrier. Apple has built its iPhone business around selecting a single partner per country, and in exchange for the exclusivity, it receives a cut of new customer signups.

The court initially agreed, issuing an injunction that required T-Mobile to also sell an unlocked version of the iPhone without contract. The company said it would do so for a cost of 999 euros, a price at which it knew few customers would bite. With a two-year T-Mobile contract, the iPhone costs 399 euros in Germany.

Although the European Union has tougher laws protecting consumers from unfair bundling practices than in the United States, the Hamburg court has decided that T-Mobile can sell a phone under contract that cannot be used on other wireless networks. It's not clear if Vodafone will appeal the ruling, which could affect future device deals in the EU as well.

In a statement, T-Mobile said it was pleased with the decision and will stop selling the unlocked iPhone. However, the company added that it would unlock customers' phones once their contract expired -- something that won't happen until November 2009 at the earliest.

Vodafone, the largest wireless network in Europe which also holds a stake in US-based Verizon Wireless, has lost out to competitors across the continent when it comes to selling the iPhone.

In France, Apple has partnered with Orange, while selecting O2 in the UK. Analysts point out two reasons for this: first, the iPhone is not compatible with Vodafone's 3G network. Second, Apple can negotiate better revenue deals with smaller carriers like O2 and Orange because they have less leverage in the marketplace.