updated 07:50 am EDT, Fri August 28, 2009
China Unicom iPhone Deal
China Unicom on Friday confirmed in its interim results that it had reached an agreement with Apple to carry the iPhone in China. The news supports word of finished talks and will launch the smartphone sometime in the fall. Most terms aren't available, but China Unicom has said the deal extends for three years and that two models will be involved, at least one of which is likely the 16GB iPhone 3GS.
Past agreements in Russia and elsewhere may be clues as to the terms of the deal, as they have often had minimum unit sales guarantees attached. Unofficial details from Chinese site cnBeta have claimed that, in keeping with the conventional Chinese approach to phones, hardware prices will be high in return for lower service rates: while an 8GB iPhone 3G would cost 2,500 RMB ($366) on a two-year contract, the actual service plan would cost just 186 RMB ($27) per month.
Any model should support China Unicom's 3G network, which shares the same base technology as in other iPhone-serviced countries. However, none of them are expected to carry Wi-Fi as government policy typically restricts the short-range wireless standard's use on cellphones.
The deal comes as China Unicom's profit has tumbled 42.1 percent to just over 6.6 billion RMB ($969.2 million) and as it faces increasing pressure from leading carrier China Mobile. The latter is the largest carrier in the world with an estimated 499.5 million subscribers and is about to counter the iPhone with "Ophones," devices made by Lenovo, Dell and other companies that run a custom variant of Google Android known as the Open Mobile System. It includes China Mobile apps and an app store but is also notable for including a deliberately iPhone-like interface.
Regardless, Apple's Chinese move is expected to trigger a sustained surge in iPhone shipments as the sheer population of the country, as well as a continued market for bootleg iPhones, provides a large ready market.