iPhone a flop in Europe, but why?

You can't turn a corner in any big American city without spotting some zombie-like clown groping at his iPhone. Sure, it's a nifty gizmo, but who knew it would be the ubiquitous touchstone it's become since its release here last year?

But while the iPhone has been a smash hit in the U.S., it's an unabashed flop in Europe, according to the German publication Spiegel. Expectations had initially been just as high there as they were on our shores, but financial analysts say sales "have been far below [those expectations]." How bad? One analyst had expected half a million sales in Q4 2007 in France, Britain, and Germany combined. Actual sales: about 350,000. Figures are even worse for Q1 2008.

What's going on? Spiegel notes two specific things that are impacting sales abroad. First, the iPhone is expensive (an unlocked iPhone in France costs 749 euros, or the current-day equivalent of nearly US$1,200. Service runs up to 119 euros a month ($189). Would you spend more on a phone than you would on a laptop? (In response, both UK and German carriers are slashing prices on the phone.) The other issue: Competition from Nokia. Nokia hasn't been a major player in the U.S. in years, but it still owns its backyard, the European market. With hot handsets at decent prices, Nokia is eating Apple's lunch abroad.

Not mentioned in the story: Performance. Yes, the iPhone is leaps and bounds ahead of anyone else right now in the world of user interface, but it's slow. In Europe, where 3G phones have reigned for years, the pathetic performance on the iPhone must be creating absolutely terrible word of mouth. Imagine a poor Parisian who just shelled out a thousand bucks for his iPhone, showing it off to his friends, only to have them wait impatiently for over a minute while it loads a web page. Not exactly a ringing endorsement when far cheaper phones can do the job with minimal wait.

Apple will respond, one of these days, with a 3G phone, and one has to presume that getting it into European hands is a priority to stem the sales decline and meet that goal of selling 10 million handsets by the end of the year. Of course, we wouldn't mind getting our mitts on it here, too, Mr. Jobs...