The $890 iPhone rebate

November 27, 2007, 10:20 PM UTC

Apple (AAPL) and T-Mobile may have thought they could choke off the sale of unlocked iPhones in Germany by pricing them high enough — and 999 euros ($1,485 at today’s exchange rate) is certainly pretty steep for a cell phone that ordinarily sells for 399 euros in Europe and $399 in the U.S.

But they probably didn’t figure on the competition using that 600 euro ($890) price differential as a crowbar to pry open the German iPhone market.

Debitel, a network operator that buys airtime from T-Mobile and other German carriers and resells it — announced today that it is offering a 600 euro rebate to any customer who buys an iPhone from T-Mobile and agrees to use it instead on Debitel’s cellular network.

T-Mobile had signed a deal with Apple to be the iPhone’s exclusive carrier in Germany, but was ordered by a Hamburg court last week to offer customers the option of buying unlocked iPhones without a T-Mobile contract (see here). Debitel has apparently calculated that it’s worth 600 euros each to lock customers into 2-year agreements.

France Telecom’s Orange division is also planning to charge a premium on unlocked iPhones when the devices go on sale in France later this week, but one that’s “substantially lower” than 600 euros. (See Paris: The city of unlocked iPhones.)