China Unicom gets iPhone?

(Updated with Unicom response) China Unicom has allegedly landed a three-year contract for the exclusive rights to local iPhone distribution, according to a Shanghai Securities News report. The deal, described by unnamed sources, is said to extend for three years and guarantees annual sales of 1 million to 2 million units.

Apple recently acknowledged that bringing the iPhone into the Chinese market held a top priority. The recent report suggests the potential carriers could not come to agree on revenue sharing terms. Soon after the first iPhone was released, sources claimed AT&T was paying between $150 to $200 per purchased phone and an additional $9 for each month of the standard two-year duration of a customer subscription.

Beijing reportedly objected to the idea of revenue sharing, although the carrier has agreed to purchase the devices for 3,000 yuan (~$439 USD) each. The terms also mandate a minimum overall revenue of at least 5 billion yuan (~$732 million USD) every year.

China Mobile, with a much larger subscriber base than China Unicom, was also involved in talks for the iPhone. Disagreements became known in January of last year, however, and it is unclear if the companies made further attempts to work out their differences.

The Chinese iPhone is expected to be customized for the local market, although specific details remain unconfirmed. An anonymous source recently claimed Foxconn has already begun mass production. The device is said to keep 3G and Bluetooth, while omitting Wi-Fi to comply with local regulations. [via Reuters]

Update: Agence France-Presse now quotes a Unicom spokesman as saying that while the carrier is close to a deal, there are still problems to be negotiated. "Both sides have their own timeframe for an agreement but essentially it depends on the practical progress of the negotiations," according to the spokesman. He adds that proper negotiations with Apple began in January, when the Chinese government began issuing 3G licenses.

by MacNN Staff