iPhone still facing challenges in China

14 December 2009

BEIJING: Sales of Apple's iPhone have passed the 100,000 mark in China, but the smartphone is still said to have fallen short of expectations in what is regarded as an increasingly vital market for the telecoms sector.

The pioneering touchphone was launched in the world's most populous in late October this year, via an exclusive agreement with China Unicom.

However, only 5,000 handsets had been purchased by November 3, compared with a total of 270,000 in the US just 30 hours after the device was released.

Paul Wuh, an analyst tracking China Unicom's performance for Samsung Securities, argued that "iPhone sales have been disappointing" thus far.

"For China Unicom, with 144 million subscribers, 100,000 iPhone users aren't going to do anything for their revenue," he added.

One obstacle facing Apple's offering is price, as it is currently available for between $730 (€495; £447) and $1,020, with some discounts depending on which contract shoppers opt for.

According to Wuh's estimates, there could also be as many as 2 million active "grey market" iPhones in the Asian state, which were originally acquired in areas such as Hong Kong.

One possible benefit to China Unicom, he suggested, is that owners of these unofficial alternatives are changing over to its network, as no other provider has the technology required to use the iPhone's 3G services.

At the end of October, China Unicom had a reported 1 million 3G customers, and the organisation has stated an intention to improve this figure by 1 million people a month going forward.

China Mobile is the biggest player in the domestic telecoms category, with a user base of 513.5 million users, and is also in talks with Apple about the possibility of selling the iPhone.

Data sourced from Wall Street Journal; additional content by Warc staff