Even before Apple's iPhone 3G hits stores across much of Europe on July 11, the highly anticipated handset has already run into a few problems. On July 7, a mad rush of British consumers looking to preorder the phone with network operator O2 caused the company's Web site to crash. "We've never seen any mobile device create [such] excitement," says Ronan Dunne, O2's chief executive in Britain.
As consumers prepare for the iPhone launch, Apple and its telecom partners, such as France's Orange and Germany's T-Mobile, are banking on similar surges in demand. That would mark a change from the first-generation iPhone, which was only a modest success in the Old World. When it was launched last November, Europeans were less enthusiastic than their U.S. counterparts, chiefly because the iPhone's price was high and it used slower, second-generation mobile technology, which put it behind multimedia 3G phones from the likes of Nokia and Sony Ericsson.
Now, the iPhone 3G's upgrades, including GPS and support for faster connections, could win over European consumers. By lowering the price for an entry-level model with 8 gigabytes of memory to roughly $199, Apple has pitched the phone directly to the Continent's mass market, where consumers are accustomed to heavily subsidized handsets.
Music and Video Appeal
The iPhone 3G's multimedia applications, including access to Apple's iTunes music and video store, also may help drive sales because Europeans have embraced mobile media faster than their U.S. counterparts. "The improvements to the iPhone have put Apple on a more competitive playing field with its rivals," says Tony Cripps, a senior analyst at telecom consultancy Ovum in Britain.
Still, Apple won't waltz away with the market. Nokia and Sony Ericsson remain powerfully entrenched in Europe, and even at its reduced price, the iPhone still comes in at the upper end of the scale....

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