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China Unicom inks iPhone deal with Apple

CHINA Unicom Ltd has signed agreements with Apple Inc to introduce iPhone into China, the world's biggest mobile phone market, Shanghai Daily learned today through two sources.

China Unicom will launch the iPhone model bundled with its telecommunications fee packages when it officially starts commercial 3G services, a China Unicom source told Shanghai Daily today.

China Unicom has started trial 3G services in 55 cities nationwide and it is expected to launch commercial 3G services by the end of this year, the country's No. 2 carrier said today.

"It will be the latest iPhone model in China, iPhone 3GS," said the source.

Compared with previous iPhone models, iPhone 3GS features a more powerful camera, bigger storage capacity and support for more applications.

Under the agreement, China Unicom will purchase iPhones from Apple for 3,000 yuan each and guarantee annual sales of 1 million to 2 million units and at least 5 billion yuan (US$731.8 million) in annual revenue, the Shanghai Securities News reported.

Apple declined to comment. China Unicom would only say it was in talks with Apple over iPhone.

Shanghai-listed China Unicom's shares increased 0.39 percent to close at 7.76 yuan today, compared with a 0.09 percent gain in the local stock market.

Whether the iPhone has Wi-Fi function, which is restricted in all domestically sold phones, hasn't been decided. The iPhone price in China was not available, the sources said.

China Unicom and Apple are likely to have a two-year exclusive agreement and three iPhone models will be available in China, Merrill Lynch & Co said in a report recently.

"The cooperation will open the door for Apple to enter the huge China market," said Sherrie Huang, an analyst at Ovum, a United Kingdom-based consulting firm.

"It also gives China Unicom a competitive weapon in the high-value subscriber segment," Huang added.

It's estimated there are 10 million users of overseas iPhones in the country, according to Ovum.
By the end of June, China Unicom had 140 million subscribers, only one-third of China Mobile's total base.

The iPhone will help the carrier attract high-end users, especially in the era of 3G, said Wu Dazhao, an analyst of Analysys International, a Beijing-based IT consulting firm.

China issued 3G licenses in January and the next-generation mobile communications allow users access to high-speed services like video calls and film downloads.

The iPhone's large touch-screen and millions of applications help people better enjoy data services, especially in 3G, analysts said.

In June, an iPhone was found to pass the wireless examination in China conducted by the State Radio Monitoring Center of China as posted on its Website.

Meanwhile, Apple was recruiting a project manager in China for the iPhone on its Website.


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