3G iPhone in production, Euro-networks lose on v.1

 Apple has placed orders for the production of the second-generation iPhone, while its European network partners complain at lower than expected sales.

The company has asked its Far East suppliers to produce 200,000 units of the new second generation 3G-enabled iPhone by the end of May, with production ramping up to two million, or 500,000 per week, in June, making a June release of the device a done deal.

This information comes from a reputable source – The Times newspaper, which explains the new iPhone will have a "radically different" appearance to the current generation. "Among the possibilities are flip version, which would enable the screen to be larger, and a sliding model with a regular qwerty keyboard – as opposed to a touchscreen one," the report informs.

The report also predicts prior claims multiple iPhone versions will eventually be made available, and suggests Apple may end its current strategy of introducing the device into specific countries in partnership with one mobile operator in favour of making it available through multiple carriers. Apple has described itself as "not wedded" to its exclusivity strategy, but the report explains it may diversify availability of the product perhaps as soon as next year.

The Times also reports disappointing iPhone sales in Europe. Germany, France and the UK between them reportedly sold 333,000 units by the end of December, but expectation had been for between 500,000 to 600,000 sales in the period. As it is, Apple’s network partners appear left with significant stock of the current generation of the device, leaving them exposed to potentially losing money on the deal, though Apple’s meeting with Orange France this week suggests the company is under some pressure to share that risk. Kathryn Huberty, an analyst at Morgan Stanley told The Times that losses on early model iPhones would be "significant".


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