France may miss out on iPhone

French newspaper Les Echos reports the relationship between Apple and Orange is not going smoothly.

While there is a suggestion that Apple CEO Steve Jobs took offence when Lombard made the announcement without him, a bigger stumbling block seems to be a French law that prohibits any requirement that a product and a service are purchased together. This threatens Apple's plans for a single iPhone carrier in each geography.

Despite Apple's professed dislike of handset subsidies, one possibility would be to offer an unlocked iPhone in France at a price significantly higher than that of the phone plus two years service. That might have a sufficient deterrent effect without falling foul of the law, but it could also make France the centre of an international grey market in iPhones.

According to Les Echos, a source at Orange said “The risk we are evaluating is that Apple crosses France [off the iPhone list]. We have a plan B. There is still a chance that we have the iPhone, but we are very close to the limit where the company's plan is endangered."
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