iPhone Could Have Two Sellers in China

By
Dan Nystedt
November 14, 2007, 7:17 PM ET
3 min read

— -- China Unicom may be open to selling Apple's iPhone in China, giving Apple a second option for bringing its device to the world's most populous market.

China Unicom, the second largest mobile telecom network operator in China, has no plans currently to offer the iPhone, but it would consider talking to Apple about a tie-up, an executive said Wednesday.

The comments come a day after the CEO of larger rival China Mobile said his company is in talks with Apple to sell the iPhone. The news sent China Mobile's shares up 9.2 percent to HK$140.80 on Wednesday, while Apple's shares rose 10.5 percent to US$169.96 a day earlier, when news of the discussions broke. Even shares of China Unicom rose 6.2 percent to HK$15.44 per share, on the expectation that the company was probably in talks too. But that's not the case.

"We're not in any discussions with Apple right now," said Li Zhengmao, an executive director and vice president at China Unicom, on the sidelines of the GSM Association's Mobile Asia Congress in Macau.

Still, Li said his company would be open to talks with Apple, giving the U.S. company another potential channel to reach China's half a billion mobile phone users.

At the end of September, the country had 523.3 million mobile phone subscribers, according to China's Ministry of Information Industry. China Mobile held around two-thirds of the market, with nearly 350 million subscribers, while China Unicom had 156 million.

The iPhone has been a hot item this year. Apple has been signing exclusive deals with operators to sell its iPhone, including O2 in the U.K. and AT&T in the U.S. As part of the deal, Apple requires the operators to pay it a portion of their iPhone subscriber revenue.

Apple shipped 1.39 million iPhones from its launch through the end of its fourth quarter, Sept. 29, and saw sales increase after it reduced the price of the 8G-byte iPhone by $200, the company said last month. Its target for next year is to sell 10 million iPhones. The company has said it will roll out iPhones in Asia next year.

China Unicom's Li also said his company has no immediate plans to build a 3G (third generation) mobile network in China based on China's home grown TD-SCDMA (Time Division Synchronous Code Division Multiple Access) technology. Last month, the company won a license to build a 3G network in Macau, and plans to use CDMA2000 (Code Division Multiple Access) 1X EVDO (Evolution Data Optimized) technology.

China Mobile will have 3G services based on TD-SCDMA in place in eight major Chinese cities by the end of this year, and up and running in 10 cities by the time the Beijing Olympic Games open in August 2008.