China Unicom signs iPhone deal
China Unicom announced Friday that it had struck a deal with Apple (AAPL) to bring the iPhone to the world's largest cellphone market.
The announcement ends months of speculation and represents a coup for China Unicom, the country's No. 2 carrier with more than 140 million subscribers. Apple's negotiations with giant China Mobile (nearly 500 million subscribers) broke down earlier this year.
"We believe China Unicom's high-speed mobile broadband network, coupled with … (the iPhone) will create new communication and different experiences for customers in China," said Unicom CEO Chang Xiaobin at a news conference.
A brief statement in the press release announcing China Unicom's interim earnings said that a three-year deal agreement with Apple had been reached on Aug. 28 and that the initial launch was expected to occur in the fourth quarter of 2009. No details of pricing or revenue sharing were announced.
But according to earlier reports in the Chinese business press, China Unicom has agreed to buy 5 million iPhones for $1.46 billion.
According to these press reports, Apple is building two different iPhones for the Chinese market.
The first to win approval by the Chinese Ministry of Industry and Information Technology does not receive Wi-Fi signals — a feature Apple agreed to remove in order to get around Beijing's restrictions on handsets with high-speed Internet capability.
But according to Dan Butterfield, editor of iPhonAsia, a second model has been submitted to China's Telecommunication Tech Labs for testing that is capable of receiving both Wi-Fi and WAPI, a Chinese standard for wireless networks.
The deal announced on Friday represents the biggest prize in Steve Jobs' two year campaign to blanket the world with iPhones.
As of June, Apple had sold 26.4 million iPhones in more than 80 countries.
China has some 700 million mobile customers. Its large and growing middle class has both disposable income and a sophisticated taste for high tech gadgetry. An estimated 1.5 million gray market and counterfeit iPhones have already made their way to China.
Sanford Burnstein's Toni Sacconaghi told the Wall Street Journal earlier this week that he believes Apple will sell 2.9 million iPhones in China by the end of 2011, an estimate that seems low given reports of a 5 million unit pre-sale.
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Certainly China is going to give the kind of boost that would propel Apple further as a company and AAPL as a stock. Check-out the propeller behind Apple's growth at amiteshtyagi.com
Technologycritics makes a very interesting analysis ( http://technologycritics.wordpress.com/2009/08/06/adroids-opportunity-against-apple/ ) of what this implyes in terms of the battle between Google's Android and Apple's iPhone. I tend to agree, specially after reading the news of today, with his coments.
I would also like to point out two relevant factors that may affect this:
a) There are around 8-10 million new mobile phones in Chine each month
b) China Unicom main non-chinese shareholder is
Telefonica, one of the biggest and most successful Telecom Operators of the world
c)) Apple is changing the model of distribution
Manuel No Sanchez
It'll be a darn sad statement for China and the iPhone if China Unicom can't manage to sell iPhones to at least 2% worth of their subscriber base. If not, then I guess the talk about China's wealth is just a myth or highly exaggerated.
If the Chinese have the money and the iPhone doesn't become popular than I guess the Chinese mindset is totally different from Westerners. Is it possible that Chinese have a fetish for keyboards like BlackBerry users do? I'm just trying to grasp why some people are saying the iPhone will be a flop in China when it isn't a flop in most of the nations where people can afford to buy them. I'm not sure what happened with Russia. I suppose the majority of people there just can't afford any expensive handsets.
Sure, the iPhone a flop in India where the majority of people can barely manage to buy food or toilet paper. That I can understand, but China is really supposed to be flowing with money. There have to be some status seekers in China willing to spend money on high-end cellphones.
But when can I get an iPhone here in Wyoming??? To date, only a meager portion of WY will get coverage within the coming 12 months.
A little off topic, but I have the AT&T mobility app to pay for my iphone bill and to check usage. When I now check my data usage, I have 0 of Unlimited used for "Text/IM Messaging" and all of my Text message usage is under a heading called "Integrated Messaging". Could MMS be around the corner?
What other mobile phone companies already have deals in China? And what OS do the phones in the Chinese market use?
The subject line has a spelling mistake: It's China Unicom and not China Unicon
ex ped: Fixed. Thanks.
Manuel writes:
"Technologycritics makes a very interesting analysis ( http://technologycritics.wordpress.com/2009/08/06/adroids-opportunity-against-apple/ ) of what this implyes in terms of the battle between Google's Android and Apple's iPhone. I tend to agree, specially after reading the news of today, with his coments."
If you want my two cents, Android is dead in the water. Forget about it.
I recently threw all my toys out of the Apple developers pram and decided to start writing apps on Android. I thought I was finally setting myself FREE!!! Free, free at last. Thank god we are etc.
Well, that was a crock. Talk about walking into the gulag. The horror of Android is immense.
But first, credit where it is due. The SDK GUI for Android is OK. So is the simulator. Complex to set up, but OK.
And the language is fine. Apple don't win any prizes for the keen way they choose to write the C language. Java is fine.
But what is not fine… what has bags and bags of suck and fail hanging from it, is the physical limitations of the non-iPhones. When it finally dawned on me that my user was going to be able to type characters or press a "delete" button…. I felt the horror. I saw Android's fate right then.
I have become used to a device that allows scrolling. It allows the user to tap, to double tap, to pinch, to zoom, to rotate, to shake and to drag stuff from one end of the interface to the other. With the FINGER ITSELF.
When you go from designing applications for that sort of interface, and you start thinking about "OK, so my user can type characters with the keypad…. or press "delete" or "return"…. and that is it.", the reaction is pure horror.
I dropped Android like a stone as soon as I understood. I mean it. I stopped typing code, I sat and thought for a few minutes, then I logged out of the SDK and deleted it from my puter. I made the sign of the cross for android, may it rest in peace, and I decided the war of liberation against the fascists at Apple corp is going to have to wait.
Just now, they have the future of mobile communication in their pocket , and others are just going to have to watch, learn and copy as best they can.
There is no question of "Apple or some other brand", regrettably. The only question, for the developer, is whether you want a user interface people like and which can do cool things….. or whether you want your user to type characters with a keypad and suck on that experience until they hate you.
This difference is not degrees, but rather magnitudes. Think about the difference between a GUI and no GUI. Think about keyboard and mouse and just keyboard.
That is how big the iPhone advantage is just now. Apple are going to smoke China, because they have put themselves in a different class.
Stev-o is still first up against the wall when the revolution comes, of course. His restiction of the iCal API is a crime against the people, for which he has already been judged and sentenced.
But my word, is Apple going to print some coin in China.