Apple's iPhone can only help rivals in Europe

Apple is expected to hand a deal to Spanish Telefonica's O2 UK unit, and France Telecom's Orange unit is expected to win a French deal, analysts say, though the companies have maintained strict silence about any deal.

Apple signed up top U.S. telecoms operator AT&T Inc. in an exclusive deal for at least two years to sell the phone in the United States. But earlier this month, Apple cut the U.S. price for the iPhone to $399 from $599.

Analysts said Apple is likely to benefit from its strong brand and dedicated followers when starting European sales, but a limited offering and signing deals with just one telecom operator per country would put a lid on its sales hopes.

"You need a brand, a product and a distribution to get market share. They got the brand, but the product is limited and distribution is rather limited," said Neil Mawston from Strategy Analytics.

"The impact would not be meaningful largely because of the price... it looks like the product price is not subsidized," said Nomura analyst Richard Windsor.

At a price of around 399 euros, the iPhone faces competition from operators which offer models such as Nokia's N95 -- which has faster Internet connection via 3G, a 5-megapixel camera and a GPS positioning chip -- for free on longer contracts.

Analysts pointed also to the difficulty of typing SMS messages on a touch screen, long contracts, built-in batteries and 3G capability.

"We don't see enormous impact as 3G is becoming a must in smartphones. There are no meaningful EDGE networks in Europe," said Nomura's Windsor.

But not all analysts agreed.

"It doesn't actually matter, people buy it as a status symbol," said CCS's Ben Wood.