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Telco to launch iPhone 3GS

CHINA Unicom Ltd has signed an agreement with Apple Inc to launch the latest iPhone on Chinese mainland, the world's biggest mobile phone market, Shanghai Daily learned yesterday.

Under the deal, the telco will sell the iPhone bundled with its telecommunication fee packages when it officially starts commercial 3G services, a China Unicom source told Shanghai Daily yesterday.

China Unicom has started 3G service trials in 55 cities nationwide and it is expected to launch the service commercially by the end of this year, the country's No. 2 telco said yesterday.

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

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

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

Apple declined to comment, and China Unicom would only say it was in talks with Apple on the iPhone, without providing more details.

But what has not been decided is whether the iPhone to be sold domestically will be allowed to keep its Wi-Fi capability. Also not decided is the selling price of iPhone in the domestic market.

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

"The cooperation will open the door for Apple to enter the huge China market," said Sherrie Huang, an analyst at Ovum. "It also gives China Unicom a competitive weapon in the high-value subscriber segment."

It's estimated that there are 10 million users of overseas iPhones on the mainland, according to Ovum, a United Kingdom-based consultant.



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