Apple is setting down terms for Israeli cell phone companies interested in selling its new iPhone 5. According to a Yediot Achronot report, each company will have to commit selling 130,000 phones annually for the next three years in order to be eligible to offer the phone to consumers. This quantity represents 50% of total sales of the local cell phone companies.

The deal amounts to a 300 million NIS annually for each company. It appears that Apple is uninterested in the limitations of the local marketplace and any company wishing to offer the state-of-the-art smart phone to its subscribers will have to commit to the minimum sales stipulation.

Yediot adds that Apple is finalizing a contract with Israel’s top cellular companies, Orange, Cellcom and Pelephone, with each committing to the minimum number as the phone continues to enjoy growing popularity in Israel.

Yediot explains that the realities of the cellular telephone marketplace in Israel have changed dramatically of late, with the new regulations permitting additional carriers; the sharp reduction in prices; the de-linkage between phone plans and the actual hardware (phone); the growing Android market; and one’s ability to purchase a phone privately all contribute to a different cellular market than was seen months ago. Yediot feels that by committing to Apple to stand by the sales minimum, the companies will harm their relationship with the other phone companies and consumers, since many Israelis are still seeking less expensive models, realizing the iPhone 5 is the most expensive phone available.

Yediot’s “Money” Magazine has learned that some of the other phone manufacturers are turning to appropriate government agencies to prevent signing the agreement, which they feel will place the others out in the cold and violate trade agreements and compromise the basics of a free marketplace, adding that since Apple is an international company, the Israeli authority over the cellular industry may not have the right to intervene.

(YWN – Israel Desk, Jerusalem)