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French retailers have started selling iPhones, previously only available from network operator Orange, though at such a high mark-up that the offer is not that tempting.

French law restricts anti-competitive behaviour such as exclusive availability or locking hardware to specific networks, which has threatened Apple's business model for the iPhone since it was launched across the Channel. Orange managed to work around the restrictions by selling unlockable handsets for €649, and unlocking them for an additional €100 - waived after 6 months, which allowed to keep exclusive distribution rights.

But French retailer FNAC is now offering an 8GB iPhone, without recourse to any network operator, for €799 - so an additional €50 for the less paperwork and the ability to walk out of the store with an unlocked device rather than having to go through the two-step process offered by Orange.

That's more than $1,100 for an unlocked handset - hard to imagine Apple, or Orange, is losing any sleep over an offer like that. More interesting will be if other French operators decide to flog the handset with a decent subsidy, locked to their own network for the six months that French law allows.

When the iPhone was launched Apple made much play of the lack of operator subsidy, but to get the 3G version into punters' hands the boys in Cupertino have had to accept the operator shilling.

Not that Apple cares if an iPhone is locked to a specific network operator or not - as long as it remains locked to the Apple Application Store.

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