Apple In iPhone Talks With China Carrier - InformationWeek

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12:42 PM

Apple In iPhone Talks With China Carrier

The second-largest wireless carrier in China denies reports it has already purchased 5 million iPhones for a September launch.

Apple is in negotiations with China Unicom to release the iPhone in the nation of more than one billion potential customers.

Executives from the second-largest Chinese wireless operator said the companies have been negotiating, but the deal is not yet done. This comes after a China Business News report said Thursday that China Unicom agreed to purchase 5 million iPhone handsets from Apple for a September release.

"Talks between us and Apple have been going on for some time, but no agreement has been reached yet," China Unicom spokesman Yi Difei told The Associated Press. "There are all kinds of possibilities. There is no particular timetable for the talks."

Getting the iPhone to the Chinese market could be a major coup for Apple, as the country is full of potential for handset makers due to the sheer size of its population. While most of the country's cell phone subscribers use entry-level handsets from the likes of Motorola, Samsung, and Nokia, users are increasingly upgrading to more sophisticated smartphones that can play music and browse the Web.

A distribution deal in China could be a significant boost to Apple's bottom line. The 5 million units in which China Unicom reportedly has shown interest is almost equal to the number of iPhones Apple sold in the second quarter, according to Gartner statistics. Apple would likely have to alter the device before selling it though, and this could include removing Wi-Fi and altering the 3G standard to comply with Chinese regulations. With the overall cell phone market expected to dip about 10% this year due to the recession, Apple is not the only company looking at China for growth. Dell is reportedly readying a smartphone that runs the Google-backed Android operating system for the Chinese market.

Computer-maker Acer recently jumped into the smartphone market and it plans to release handsets in China later this year or in early 2010.

Most companies are just starting the hard work of mobilizing workforces by bringing the software they use to smartphones. InformationWeek analyzed this issue in an independent report, and it can be downloaded here (registration required).

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