Apple signs deal for China iPhone launch

Posted 08 29 2009 7:40AM

HONG KONG (AFP) – China Unicom and US high-tech giant Apple on Friday announced they had reached a multi-year deal to launch the widely popular iPhone in the world's largest mobile market later this year.

The announcement marks the iPhone's long-awaited debut on the mainland, which has about 687 million mobile phone users and is one of the last major markets where the trendy smartphone is not yet officially sold.

"Today, the company and Apple reached a multi-year agreement for the company to sell iPhones in China," China Unicom chairman Chang Xiaobing told a press conference in Hong Kong.

"The initial launch is expected to be in the fourth calendar quarter of 2009. This will provide users with a brand new communication and information experience."

Alan Hely, an Apple spokesman based in London, confirmed the deal to AFP, but gave no specifics.

Chang said China Unicom and Apple would offer stripped-down eight-, 16-, and 32-gigabyte iPhones without wireless Internet capability.

Analysts say the Chinese government opposes phones equipped with Wi-Fi out of fear that state-owned telecoms companies will lose revenue due to the large number of free wireless hotspots in the country.

But Chang said most of the smuggled, bootleg or "unlocked" iPhones already available in China were 2G models, and expected that sales of the new iPhones would boost China Unicom's revenues.

The company, the smaller rival of China's largest wireless operator China Mobile, started iPhone negotiations with Apple after the government issued third-generation, or 3G, mobile phone licences in January.

Chang and China Unicom president Lu Yimin said their company aimed to take more than one-third of China's 3G mobile market next year.

The iPhone is likely to be priced from 2,999 yuan (439 dollars) with a requirement that users also buy 3,000 yuan worth of pre-paid calls, the Caijing business magazine reported Thursday, citing sources close to the talks.

China Unicom, which had 140 million mobile subscribers by end-June, expects to attract high-end users with the iPhone to turn around weak performance in competition with arch rivals China Mobile and China Telecom, reports have said.

The confirmation of the deal with China Unicom means Apple has dropped China Mobile, which has been in similar talks with the US company for years.

China Mobile, which had 493 million subscribers by the end of June, is developing a handset similar to the iPhone with firms including Chinese computer maker Lenovo, previous media reports said.