France investigates expensive Apple deals with mobile carriers

French authorities are reportedly investigating Apple's relationships with wireless carriers in the region.

As reported by the Wall Street Journal, officials are looking at the terms of the deals that the Cupertino-based company signs with carriers as part of a larger probe into agreements between phone makers and wireless providers.

At issue are terms that require providers to purchase a large number of devices and set aside a certain amount of money to market iPhones, the Journal said.

In the US, carriers have talked openly about how expensive it is to offer the iPhone, but they largely believe it's worth the cost. "The iPhone is an expensive contract but ... worth every penny," Sprint chief Dan Hesse said after his company first secured the iPhone in 2011.

In July, there were reports that an iPhone sales shortfall might cost Verizon Wireless up to $14 billion (£8.7 billion). Verizon signed a three-year contract with Apple, agreeing to sell $40 billion to $45 billion worth of iDevices between 2011 and 2013, Moffett Research said at the time.

However, shortfalls in the first two years left the carrier with $23.5 billion (£14.6 billion) in aggregate "purchase commitments" — more than two times their actual iPhone sales in 2012.

Leap Wireless felt a similar financial crunch in February. According to regulatory filings, Leap Wireless agreed to purchase a certain number of iPhones from Apple over a three-year period in order to offer the smartphone on its network. But Leap said it expected to buy half the number of iPhones it pledged to purchase by June 2013, which could have put it in the hole for $100 million (£62 million) if Apple came calling.

According to the Journal, meanwhile, competitive pressure from Samsung has prompted Apple to back down somewhat on its contract demands in Europe. But it still saw strong sales and long lines when the new iPhones launched there last week, perhaps giving it more leverage.