T-Mobile is celebrating today as it has successfully convinced a German court to reverse an injunction issued last month requiring the company to sell an unlocked version of the Apple iPhone (News - Alert) in Europe’s largest economy.

The iPhone debuted in Germany on November 9th and was available only with the two-year contract from T-Mobile. These locked iPhones have a locked SIM card that prevented users from switching the device to any other operator’s network.

The injunction against T-Mobile was sought by Vodafone (News - Alert) in an effort to prevent T-Mobile from selling so-called locked iPhones under the requirement that users sign two-year contracts. The challenge was enough to prevent sales last month, but not enough to make it stick.

When the injunction was issued, T-Mobile responded with the announcement that it would offer unlocked, contract-free iPhones for $1,481, significantly higher than the $591.85 regular price. This hike was in an effort to honor the decision and compensate for the loss of potential revenue.

On Tuesday, the Hamburg District Court ruled that T-Mobile, part of Deutsche Telekom (News - Alert) AG, could in fact sell the phone, along with a two-year contract. In addition, the T-Mobile iPhone could not be used on networks provided by rival wireless companies.

If Vodafone had been successful, it could have threatened Apple’s (News - Alert) unique royalty and revenue sharing arrangement it has negotiated with its telco partners. Apple offers specific partners exclusive iPhone selling rights in exchange for a percentage of the monthly subscription rights. It has been estimated that Apple enjoys as much as 10 percent of the proceeds.

Apple's strategy to this point had been to offer the iPhone through an exclusive mobile operator for each region: AT&T (News - Alert) in the United States, O2 in Britain, T-Mobile in Germany and France Telecom's Orange wireless arm in France.

Software updates have also been issued by Apple to disable the workarounds that hackers have developed to get the iPhone to work on other networks. Apple currently faces two consumer lawsuits in the United States in which the company is accused of unlawfully restricting consumer choice by preventing users from unlocking their iPhones.

T-Mobile spokesman Rene Bresken, noted in a company statement that the T-Mobile is pleased with the outcome. Shares of Deutsche Telekom gained 1.2 percent after the decision in Frankfurt.

While it is hard to blame Vodafone for wanting a piece of the iPhone pie, Apple has the right to enter into specific and exclusive agreements with its partners and limit the availability of its product. Such exclusivity helps to drive demand, as well as profits. Such an arrangement is also in line with Apple strategy – one that drives significant success for the company.

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Susan J. Campbell is a contributing editor for TMC and has also written for eastbiz.com. To see more of her articles, please visit Susan J. Campbell’s columnist page.

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