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China Unicom takes a bite of Apple pie

By Wang Xing (China Daily)
Updated: 2009-08-29 09:18

Well, now you can have your iPhone and use it too, albeit without, don't let this break your heart, the Wi-Fi facility. Use it too because - as British telecom consulting firm OVUM says - there are already about 1 million iPhones in China without an official network.

The iPhone had been coming ever since China Unicom launched the country's first 3G service earlier this year. China's second largest telecom operator ended months of speculation on Friday, saying it had signed a three-year contract with Apple Inc to sell iPhones in the country from later this year.

The deal that gives the world's largest mobile phone market (with more than 680 million users) arguably the smartest cell phone is expected to help China Unicom draw away some "elite" users from rival China Mobile.

But Wang Yuquan, senior Frost & Sullivan consultant, disagreed. He said iPhones might not pose a threat to China Mobile because lack of Wi-Fi facility would keep many buyers away from them.

China Mobile, on the other hand, is likely to release a series of new 3G handsets compatible with its TD-SCDMA standard on Monday.

Apple had been in talks with China Mobile since 2007 to introduce iPhones in China. But it turned to China Unicom because its WCDMA 3G standard is more suited to Apple's iPhone 3G and iPhone 3GS, the latest model.

These models will be among those on offer, Chang Xiaobing, chairman and chief executive of China Unicom, said at a news briefing.

The deal, however, doesn't involve revenue sharing with Apple, China Unicom said, denying earlier reports that it had agreed to buy 5 million handsets from the American company for 10 billion yuan ($1.5 billion).

An Apple China spokesperson confirmed the deal, but refused to give any details.

Related readings:  iPhone to enter mainland soon  China Mobile says iPhone talks scale biggest hurdle  China Unicom says Q1 profit at $525m  China Unicom full-year profit up 58%

Absence of Wi-Fi doesn't seem to make much of a difference to some users, though.

Qiu Xueying, a 28-year-old woman working for a domestic publishing house, said she would consider buying an iPhone "because I like its design and appearance a lot" and not because of its Internet-related features.

Joy Zhou, senior executive of a multinational company in China, however, said she did not have any plan to buy an iPhone any time soon.

"iPhones are too fashionable to use in a business environment," said Zhou, who spends more than 1,000 yuan a month on long distance calls to her business partners.

The launch of the iPhone is good news for China Unicom but it's too early to say whether it would help increase the number of its users and revenue, said Wang Guoping, an analyst from China Galaxy Securities.

"In China, most of the elite users are from the field of business but they don't seem that interested in iPhones," Wang said. "But iPhones will definitely attract many young users to China Unicom's 3G service."

Zheng Lifei contributed to the story