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Didier Lombard, chief executive of Orange's parent France Telecom , told a news conference that analysts' forecasts of between 400,000 and 500,000 subscribers within the first year were in line with the company's own planning.

"That is the middle of the range of our forecasts," Lombard said.

Hundreds of buyers lined up in front of Orange's Paris store on the Champs-Elysées just before the launch yesterday afternoon. The handset was sold in just 12 cities yesterday before a nationwide roll-out today.

The basic, locked phone will cost €399 but Orange will offer unlocked handsets for €649 to which the user will

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have to add €100 euros if another operator is used. In Germany where the iPhone was launched three weeks ago T-Mobile offers the device without a contract for €999.

Orange confirmed it had agreed to share revenue from iPhone subscriptions with Apple in return for its exclusivity agreement but declined to comment on analysts' estimates that Apple's cut could be around 25%.

Orange France director Louis-Pierre Wenes told Le Figaro newspaper that the exclusivity agreement was for "more than two years" but did not cover distribution.

"To be clear, Apple could one day extend distribution to other players. But in that case we have guarantees that they will be sold with Orange contracts," he said.

Investors greeted the news with enthusiasm, sending Apple's share price back above $180.

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