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Apple’s iPhone Hitting Chinese Markets on May 19th with China Unicom

Contrary to recent reports that talks between Apple and Chinese mobile provider China Mobile had broke down because of App Store negotiations, it’s now being reported that the iPhone will be arriving in China on May 19th with China Unicom.

stock1Reports that negotiations between Apple and China Mobile had broke down were true, albeit a bit premature. As it turns out, previous negotiations surrounding China Mobile and the potential iPhone 3G agreement were “becoming a threat to Apple’s business.” The “business model differences” as well as the inability to agree on distribution benefits made it so that negotiations had reached a stalemate. This is when China Unicom stepped in to takeover negotiations with Apple around September of 2008. Due to a shakeup in management on the Chinese telecommunications side, Unicom Chairman Chang Xiaobing has been appointed as the head of the team leading negotiations with Apple. If everything goes smoothly, the iPhone is expected to launch in mainland China on May 19th, 2009. Apple is expected to get between a 20% and 30% “share” of iPhone sales. Whether China will subsidize the iPhone is still unconfirmed.

According to reports from the Xinhua News Agency, a Chinese iPhone faces three core obstacles. First is the SIM card lock issue, second is the “Telecommunications Regulations”, which revolves around the device having Wi-fi functions and embedded software when working on certain networks under specific conditions, and the general support of TD cellular networks.

Apple’s iPhone 3G can currently support WCDMA, which is the dominant standard as we move forward with 3G (WCDMA/HSDPA) networks. China Mobile has invested time, money and extensive resources into the development of TD cellular networks, which the iPhone 3G cannot support. As it turns out, China Mobile would have fully supported the introduction of an iPhone 3G that can run on the TD network. “As long as the production of foreign brands TD mobile phones, China Mobile will give full support,” Wang Jianzhou, China Mobile’s CEO explained. However, Apple made no efforts to introduce such a device and China Mobile was angered. Analysts have specified that “Apple is unlikely to launch a TD edition iPhone, which requires a large number of inputs, and may give rise to enforcement and market risk.”

As Chinese news source gansudaily notes in a report about the subject, China Unicom will be restructuring its cellular network to support WDCMA, alongside a newly secured arrangement that will allow them to license certain 3G technologies. These cellular network technologies will be deployed into Chinese mobile markets making way for the iPhone, which is slated to arrive around May 19th. The iPhone 3G has simply plaid too big of a role in shaping the global market and Chinese telecom executives do not want to miss what is going on. They are deeply intrigued by the success of the App Store and have been paying extra close attention to the development of 3G networks outside of their markets.

The Chinese market has been a bit troublesome for Apple, and rumors of China Mobile subsidizing iPhones have been making the rounds since August. Back when Apple CEO Steve Jobs first unveiled the iPhone 3G back back in June 2008, he explicitly stated (youtube link) that Russia and China were the “two big ones [markets]” that Apple was working on.

Comments [2]

2 Comments to “Apple’s iPhone Hitting Chinese Markets on May 19th with China Unicom”

iomega @ February 10th, 2009 at 10:47 am
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about time – for negotiations to completely fall through for China as a whole because of the app store is preposterous


shingua @ February 10th, 2009 at 11:23 am
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I have family in China. They’ve heard the same.