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China Unicom Readies for iPhone Launch

Insiders at China Unicom's Guangdong subsidiary revealed that the operator has purchased five million iPhone W-CDMA handsets for 10 billion yuan ($1.5 billion) and the customized iPhones will debut in China next month.

Analysts believe that the iPhone would become a powerful tool for China Unicom to attract young mobile users from China Mobile, the market leader.

Zhou Youmeng, deputy general manager of Guangdong Unicom, told China Business News that the first batch of iPhones will be unveiled in China Unicom's 3G kiosks in Carrefour supermarkets as well as other key service outlets in September.

Yu Zhaonan, manager of Guangdong Unicom's consumer customers department, said that China Unicom purchased the iPhones from Apple at 2,000 yuan ($292.60) per unit. The carrier would sell the iPhones at slightly more than the purchasing price, with the 8G version at about 2,400 yuan ($351) per unit and the 16G version at 4,800 yuan ($702), he said.

The monthly rate for iPhones would be similar to the other 3G mobile phones available on the market, but China Unicom may also provide free iPhones to customers that prepay certain amount of calling fees, Yu said.

About two weeks ago, Shanghai Securities News reported that China Unicom has signed a three-year agreement with Apple for distributing iPhones exclusively in China, citing an informed source. However, China Unicom dismissed the rumor right away, saying that the two parties were still in negotiation.

Greg Joswiak, Apple's VP of iPhone and iPod product marketing, reportedly conducted a final round of negotiation with China Unicom over the iPhone on August 4.

Market researcher iSuppli claimed earlier this year that Apple spends just around $173 to manufacture a unit of the 3G iPhone. The 8GB 3G iPhone is now priced at only $99 in the US with a two-year AT&T contract.

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