China Unicom denies breakup with Xiaomi

China Unicom (Hong Kong) Ltd has denied rumors that it will end its relationship with Xiaomi Corp or ask Xiaomi for 300 million yuan ($47.22 million) to compensate the carrier for unsold cellphones.

China Unicom, the nation’s second-largest mobile carrier by subscribers, said its relationship with Xiaomi is sound, and that the carrier has sold its entire inventory of Xiaomi phones.

China Unicom agreed in December to purchase from Xiaomi 1 million Mi-One handsets for China Unicom’s 3G WCDMA network.

However, Chinese media reported that the partnership between the two could fall apart because Xiaomi announced a sudden price cut of the Mi-One in mid-August. The price of the Mi-One dropped from 1,999 yuan to 1,299 yuan.

Chinese media reported that the move could lead to a 300 million yuan loss at China Unicom, as the operator might fail to sell out its remaining inventory.

But China Unicom issued a statement on its official micro blog on Aug 28 that said its arrangement with Xiaomi continues to be solid.

“Since China Unicom partnered with Xiaomi last December, we have honored the ‘open and win-win’ principle and maintained a good relationship,” China Unicom said in the statement. With the help of China Unicom’s subsidy and marketing policies, all the Mi-One smartphones that China Unicom ordered have been sold, it added.

China Unicom also confirmed that it is prepared to sell the latest generation of Xiaomi smartphones and will continue to offer subsidies.