Cn. Unicom chair on iPhone

The chairman of China Unicom, Chang Xiaobing, has admitted to talks with Apple in regards to selling the iPhone in China, Reuters reports. Although a manager is said to have confirmed the information early last month, Xiaobing himself has not spoken about negotiations until today. "We are in talks with many handset suppliers, including Apple," the executive told gathered reporters at an event.

Unicom may in fact be the leading candidate to carry the iPhone in China, as the company's only competitor, China Mobile, has not made any progress in several months of discussions with Apple. The latter is also said to be pushing for control of a local App Store, and some of its accompanying revenue. A more immediate limitation may be that the carrier cannot support the current iPhone's 3G technology, whereas Unicom will be able to following May 17th.

Regardless of which company wins the deal, JP Morgan analysts comment that the iPhone is not expected to have a significant impact in China. Apple's clout is not especially strong in the country, the analysts note, and there are already a number of clones in the region which are likely to remain cheaper, at least in part because they are not chained to lengthy contracts. Those wealthy enough to afford real iPhones may also be using imported units unlocked for local wireless networks.

Cost is said to remain an overriding concern even for Unicom's own finances, as a Chinese iPhone will have to be heavily subsidized to be affordable, limiting any profits Unicom might make. This could be a key reason China Mobile has refused to accept Apple's terms, say the analysts.

by MacNN Staff