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IPhone officially debuts in China

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The Associated Press

Published: October 31, 2009

BEIJING - Apple's iPhone made its long-awaited formal debut in the world's most populous mobile phone market, without a key feature and at higher prices than widely available black-market models.

Apple's local partner, China Unicom Ltd., hopes the sleek smartphone will give it an edge against rival China Mobile Ltd., the world's biggest phone company by subscribers.

Unicom started selling iPhones equipped for third-generation service Friday night at 2,000 stores in areas as far-flung as Tibet. Chinese news reports say Unicom hopes to sell 5 million in three years, but the company declined to confirm that.

"Ever since we first launched the iPhone, we greatly anticipated bringing it to China," an Apple vice president, Greg Joswiak, said at a launch ceremony at a Beijing shopping mall.

Unicom's first iPhones lack WiFi, a possible handicap with sophisticated, demanding Chinese buyers. The technology, a key part of the iPhone's appeal, allows the phones in other markets to use free wireless networks in cafes and offices to download e-mail and the latest applications.

"There's going to be a perception that the phone they have is dumbed down from the one that somebody has in California," said Duncan Clark, chairman of BDA China Ltd., a Beijing-based technology research firm. "We've seen before that Chinese consumers don't like to be treated like second-class citizens."

Apple Inc. and Unicom also could face competition from an unusual source: unlocked iPhones brought in from abroad that have WiFi.

There are already an estimated 1.5 million to 2 million such phones using China Mobile 3G service that allows Internet access and other features.

Unicom's prices range from $730 to $1,025 for the high-end, 32-gigabyte iPhone 3GS. That is 20 percent above the $835 charged by merchants at Chinese street markets for a 3GS with WiFi.

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