China Unicom (Hong Kong) Ltd. has struck a deal with the hi-tech giant Apple for the first time that will grant it exclusive rights to sell iPhone in China for three whole years. The highly anticipated release of the iPhone in China is expected to be a boost for both Apple and Unicom as the mainland has about 687 million mobile phone users which is more than twice the U.S population.
The initial launch is expected to be in the fourth quarter of this year 2009. This deal provides users with a brand new communication and information experience. As per the Chinese company, “Unicom will not share revenue with Apple, as some operators do, and it will purchase the handsets from Apple on a wholesale basis and resell them to consumers.” The deal was reported by the Wall Street Journal
The iPhone deal comes with Unicom’s rollout of a 3G, network that will enable functions like wireless video and high-speed surfing. Unicom’s 3G network is the only one among three in China that is currently technologically compatible with the iPhone. Unicom Chairman and Chief Executive Chang Xiaobing said that the official launch of the network will be Sept. 28, which is expected to cover 335 cities by the end of this year and also expected to make up 20% of China’s mobile market in 2010.
The Chinese government opposes phones equipped with Wi-Fi wireless Internet capability thinking that the government-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.
Chang also said at a news briefing that it will offer a subsidy to customers to lower the iPhone’s price, but he didn’t elaborate on how much the subsidy would be. According to the Caijing magazine, the iPhone is likely to be priced for 2,999 yuan (439 dollars) with some terms and conditions. Yet there is no official news about the price from the companies. With 141 million wireless users at the end of June, Unicom hopes that iPhone will attract high-end users, which will boost its earnings, and give it a leg up on dominant carrier China Mobile Ltd., which has more than triple Unicom’s subscriber base. Still the companies left several key questions and other details unanswered.
Though several devices are expected to hit the market by the end of the year, this new deal is also expected to increase the country’s as well as the Unicom-Apple’s revenue as many Chinese IT companies have already started working on iPhone applications.