Apple Inc (AAPL)

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08:40 AAPL Apple's iPhone isn't a hit in Europe, how will it fare elsewhere? - Business Week (154.95 )

Business Week reports when the co's iPhone first went on sale in Europe six months ago, hopes were high that the device would be just as big a hit there as it had been in the U.S. But analysts are now raising concerns that the iPhone may not translate as well overseas, with sales sluggish in Europe because of the device's high price and strong competition from Nokia and others.

"Our research indicates that European shipments to date have been far below [expectations]," says analyst Richard Windsor of Nomura Securities... The co's experience in Europe raises questions about the iPhone's prospects around the world.

The co has said it wants to sell 10 mln units by the end of 2008. But Apple may need to change its business model to reach that target, perhaps by moving to nonexclusive contracts or giving up its cut of service revenues. The co may make less money off each iPhone, but it could sell many more. "If they really want to be successful in this market, they had better [change]," says Shiv K. Bakhshi, director of mobile research and devices at I.D.C.