9 Comments

Summary:

If you’re getting into the cellular phone business and want to be a big fish in a very big pond, you need to crack China. Mixed metaphors aside, China is an enormous mobile market. According to eWeek, it boasts more than twice the number of active […]

iPhone in China

If you’re getting into the cellular phone business and want to be a big fish in a very big pond, you need to crack China. Mixed metaphors aside, China is an enormous mobile market. According to eWeek, it boasts more than twice the number of active subscribers than there are people living in the U.S. (630+ million subscribers vs. America’s population of 306 million.)

It’s a big deal, then, that Shanghai Securities News is reporting that China Unicom, one of the country’s largest operators (the second largest after China Mobile), has just signed on the dotted line with Apple and will be selling the iPhone 3G by the end of September.

China Unicom has more than 135 million subscribers. (By comparison, China Mobile has over 470 million.) The company has promised to sell between 1 million and 2 million units per year, with revenue of at least 5 billion yuan ($732 million) in the same period. Reuters reports that the deal gives China Unicom exclusive rights to sell the device for the next three years. According to MacDailyNews, the iTunes Store model will remain unchanged and operate as it does in most other countries, with the usual Apple approval process and 70/30 split.

Apple has been in negotiations with Chinese mobile operators for some time. Sticking points that prevented a deal sooner are rumored to have been focused first on Apple’s proposed revenue-sharing model, and more recently around the wireless radio technology found in the handset. Most mobile devices must remove wireless transceivers before they can be approved for sale in China. There is no word on whether this is the case with the iPhone 3G.

China has had a healthy black market in the sale of imported iPhones for several years. According to The New York Times, by the end of 2007, Apple had reported sales of 3.7 million iPhones. But only 2.3 million were actually registered on the networks of Apple’s wireless partners in the U.S. and Europe. Many of the “missing” iPhones found their way to China, where they were sold for as much as 4,000 yuan (almost $600).

This will be the first time the iPhone has been officially sold in the country, but it’s not for lack of trying. Those strained negotiations I mentioned earlier? Talks between Apple and China Mobile were reportedly on the rocks as far back as January 2008. So it seems Apple has been trying to break into China since the very first iPhone was released. However you look at it, signing a deal with China Unicom is settling for second best; will that still be enough to capture a significant portion of the mobile market in that country? If the answer is yes, Apple’s global smartphone market share is about to get a lot bigger.

You’re subscribed! If you like, you can update your settings

  1. Adam-Jackson » My Opinion on Apple, Foxconn & Employee Suicide Tuesday, July 28, 2009

    [...] China Gets the iPhone…Officially 2. Report: Hon Hai to build Apple tablets as soon as [...]

  2. Premature news. China Unicom spokesperson says the deal hasn’t be done yet. We’d better just wait until Apple announces it to know for certain.

  3. Fons Tuinstra Wednesday, July 29, 2009

    It would not be the first US firm to fail because of unjustified enthusiasm. There will be no easy catch.

  4. China Gets the iPhone…Officially | All Things iPhone Wednesday, July 29, 2009

    [...] The Apple Blog] VN:F [1.5.7_846]please wait…Rating: 0.0/10 (0 votes cast)VN:F [1.5.7_846]Rating: 0 (from 0 [...]

  5. iPhone Officially Coming to China : NeonPunch: Hong Kong’s Gadget & Gear Buying Guide Blog Wednesday, July 29, 2009

    [...] like the deal is now official. China Unicom, the second biggest mobile operator in China, will carry and sell the iPhone in China this September: China Unicom has more than 135 million subscribers. (By comparison, China Mobile [...]

  6. China iPhone Images Hit the Web Friday, July 31, 2009

    [...] Written on July 31, 2009 by Charles Jade and No one has commented The unofficially official iPhone for China moved a little closer to being real…or at least some nicely faked images were made real and [...]

  7. Apple Launches iTunes Store in Mexico Wednesday, August 5, 2009

    [...] Apple has been paying a lot of attention to China. With a middle class of at least 100 million, that makes sense, but Mexico has a potentially large [...]

  8. App Store: Two Billion Apps Served Monday, September 28, 2009

    [...] The App Store opened on July 11, 2008 with 500 available apps. Six months later, some 15,000 apps had been downloaded half a million times. About three months after that, the App Store had its billionth download and a catalog of some 35,000 apps. Now, five months later, downloads have doubled again and the catalog has more than doubled. Despite legitimate concerns over the app review process, it appears there is no stopping the App Store, especially with imminent introduction of the iPhone in China. [...]

  9. Snow Leopards Leaps in Market Share Thursday, October 1, 2009

    [...] OS market share represents more than 50 million users, and with the introduction of the iPhone in China, the growth rate will likely increase [...]

Comments have been disabled for this post