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Aug. 16, 2009

Late Friday, state-owned China Unicom Ltd. said it's currently in talks with Apple about becoming an iPhone reseller but denied a report it has reached a deal to buy 5 million iPhone handsets.

Unicom is planning to offer the new smartphones in an effort to further expand its mobile network across China.

China is currently the world's biggest mobile phone market and the iPhones themselves are made in China by an Apple contractor for export to the U.S. and all the other countries where it is offered.

Apple has yet to accept and sign up a Chinese partner and many thousands of unlocked iPhones brought in from other markets are already in use in China said an Apple representative.

Unicom spokesman Yi Difei said "negociations between Unicom and Apple have been going on for some time now. However, no agreement has been reached as of yet, but there are many possibilities we are looking into. There is no particular timetable for the talks."

Yi declined to give additional details, and he also denied a report by the newspaper China Business News that claimed that Unicom secured a three-year exclusive iPhone deal and would pay 10 billion yuan (US $1.5 billion) for the iPhones.

Additionally, an Apple spokeswoman in Beijing, Tiffany Yang, said she had no information about an iPhone agreement in China.

An iPhone deal would definitely help Unicom compete with giant China Mobile Ltd., which currently dominates the mobile market in that country.

China has about 650 million mobile phone accounts, according to recent estimates. Unicom says it had 133 million accounts as of Dec. 31, 2008, while China Mobile, the world's biggest wireless carrier by subscribers says it has more than 450 million.

The third competitor is China Telecom Ltd., with a small mobile unit.

Apple's talks with potential Chinese carriers have snagged on disagreements about how to share revenues, according to Chinese news reports.

In July, Apple reported that sales of its popular iPhone helped to boost its latest quarterly earnings by 15 percent to $1.2 billion despite the economic pull back in the United States.

The iPhone continues to beat new records globally and is currently the best selling smartphone there is.

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Source: China Unicom Ltd.