Has the iPhone failed in the UK?

Is the Apple iPhone not the hit it set out to be?

If you believe the latest numbers from Orange, then Frenchmen are snapping up Apple iPhones faster than brie baguettes - 30,000 have been sold in just five days and one analyst reckons Apple will shift half a million in Europe by the end of the year.

So how come just 8,000 Apple iPhones have been activated in the UK: is it just us Brits, or has Apple done something seriously wrong?

One thing that's clear is that Europeans don't take kindly to long or restrictive contracts. Of the 30,000 iPhones sold in France, 6,000 have been sold contract-free, despite Orange pumping up the asking price to a tear-inducing €749 (£538) - that's €350 (£253) more than with a two-year contract.

UK iPhone owners don't have that get-out - they either pony up the £269 for the iPhone plus a minimum of £35 per month for an 18-month contract with O2, or run the risk of buying a hacked handset that Apple could brick any minute. And that could be putting huge numbers of would-be iPhone buyers off. Why?

Price sensitive

By and large Brits are a cost conscious bunch, and we're used to getting our phones either for very low prices, completely free or on Pay As You Go (PAYG). That sits at odds with Apple's ambitious iPhone plans. We're also using to paying very little for phones that have way more advanced features than the iPhone has - 3G, decent stills cameras, video recording etc. The iPhone's unique UI may not be enough.

We won't really know whether the iPhone has failed until we can pore over some hard figures. Those being bandied around so far suggest that only 8,000 iPhones were activated here in its opening weekend, while The Register says that less than 30,000 have been activated in total. O2 for its part says that sales so far are inline with expectations.

Compare this to the 270,000 handsets that were sold during the US launch weekend, and the UK figures look embarrassingly low.

The numbers start to look better when you look at Europe as a whole. RBC Capital Markets analyst Mike Abramsky says that up to 500,000 iPhones will be sold in Europe by the end of the year - which isn't bad considering they've only been on sale since the end of October.

Abramsky also says that the iPhone is already out-selling some of its smartphone rivals, and that he expects Apple to shift four million in Europe next year. That should help Apple meet or exceed its own conservative estimates for worldwide sales to the end of 2008 - Apple says it hopes to sell 10 million; Abramksy says it'll shift 12.5 million.