Sept. 19 (Bloomberg) -- Apple Inc. picked Deutsche Telekom AG's T-Mobile to sell the iPhone in Germany, Europe's largest mobile-phone market.

The 8-gigabyte handset will go on sale in Germany on Nov. 9 for 399 euros ($557) including tax, T-Mobile and Apple said at a news conference in Berlin today. T-Mobile is the country's biggest wireless operator.

Apple Chief Executive Officer Steve Jobs is tapping T- Mobile's 34 million customers in Germany to help meet a forecast for sales of 10 million iPhones worldwide in 2008. The partnership may help T-Mobile, which lost out on the iPhone to AT&T Inc. in the U.S., to bolster customer spending in its home market.

``The iPhone could trigger demand for more expensive handsets in the fourth quarter,'' said Wing-Yen Choi, an Amsterdam-based analyst at Theodoor Gilissen. ``For operators, having the iPhone in their portfolio for Christmas would be very helpful.''

Apple, based in Cupertino, California, said yesterday it will sell the iPhone in the U.K. with O2 Plc, a unit of Telefonica SA, starting Nov. 9. Deutsche Telekom is Europe's largest phone company and T-Mobile sells wireless services to 112 million customers across 11 European countries and the U.S.

Jobs, 52, is counting on the iPhone to become Apple's third major business along with Macintosh computers and iPod media players, which each bring in about $10 billion in annual sales. As of Sept. 10, Apple and AT&T had sold more than 1 million iPhones in the U.S.

Lower Price

The device combines the iPod music and video player with a phone featuring a Web browser and e-mail access. The handset went on sale in the U.S. in June. Apple this month slashed the price there by $200, to $399, to spur holiday purchases.

``They have the best network in Germany,'' Jobs said of T- Mobile at the news conference. ``There's also a real cultural fit.''

The iPhone price in Germany compares with 269 pounds ($538) in the U.K., where O2 has almost 18 million clients. Apple hasn't announced its partners in France, Italy or Spain. Vodafone Group Plc, the world's largest mobile-phone operator, hasn't been selected as a partner in any country so far.

Apple and T-Mobile didn't give financial details of the partnership, such as how revenue will be shared.

In the U.K., Apple may receive 10 percent of O2's monthly subscriber fees, mirroring its deal with AT&T in the U.S., Robert Semple, an analyst with Credit Suisse in New York, said in a report yesterday. He rates Apple's shares ``outperform.'' Apple hasn't publicly disclosed the terms of the AT&T agreement.

Phone Sales

Deutsche Telekom shares rose 8 cents, or 0.6 percent, to 13.87 euros at 12:15 p.m. in Frankfurt. Before today, the shares had fallen 0.4 percent this year, compared with a 15 percent increase in Germany's benchmark DAX Index.

Mobile-phone sales are expected to reach 178 million units this year in the 16 countries that make up western Europe, about the same that will be sold in the U.S., said Carolina Milanesi, research director for mobile devices at Gartner Inc., a market researcher in Stamford, Connecticut.

Jobs has said he wants 1 percent of the global handset market next year. In Europe, challengers to the iPhone include Nokia Oyj's upgraded version of the N95 handset, which has 8 gigabytes of memory and is due to ship in the fourth quarter.

Also next quarter, Sony Ericsson Mobile Communications will start selling its W910 and W960 Walkman phones. LG Electronics Co.'s Prada has a touch-screen display similar to the iPhone's.

`Strong' Brands

``IPhone is coming up against some strong European brands,'' said Theodoor Gilissen's Choi. ``Whether iPhone will succeed or not will depend a lot on how it's doing in Europe. I don't see Europeans sleeping in the streets to queue up for the phone.''

Outside Apple's store on Fifth Avenue in New York, shoppers lined up as much as three days before the iPhone went on sale. Consumers also drove from out-of-state for the handset.

For Deutsche Telekom, CEO Rene Obermann is betting the partnership may help boost customer spending. T-Mobile's contract clients spent an average of 33 euros a month in the second quarter, compared with 35 euros in the year-earlier period. German clients spent 23 percent less than T-Mobile customers in the U.S., and 50 percent less than those in the U.K.

In Germany, T-Mobile competes with Vodafone, O2 and Royal KPN NV's E-Plus unit.

``IPhone will make a big marketing impact in helping T- Mobile differentiate itself from other operators,'' said Joss Gillet, an analyst at London-based consultant Ovum Ltd. ``Together with the launch of unlimited data packages, T-Mobile stands a good chance of driving up non-voice revenue substantially.''

To contact the reporter on this story: Kenneth Wong in Berlin at kwong11@bloomberg.net.

Last Updated: September 19, 2007 06:30 EDT