China Unicom and Apple jointly announced their contract on 28 August, ending the drawn-out discussions that prevented the popular gadget from being legally available in the country.
While it appears that China Unicom will be the sole seller of the phone for at least the near future, Apple has confirmed to Western sources that its distribution deal with China Unicom is not exclusive, which could signal good news for other players, including direct competitor China Mobile.
According to reports, China Unicom chairman Chang Xiaobing has said he is confident the company will be the only iPhone distributor in China because the handset operates on the WCDMA standard, which is the platform that China Unicom is exclusively able to operate on in the market. China Mobile operates on the domestically developed TD-SCDMA and China Telecom uses the CDMA 2000 standard.
Apple has not revealed which alternative telcos it is in discussion with but industry insiders speculate China Mobile, which claims as much as 70 per cent of China’s mobile market share, may have resumed talks with the company.
Sources have long-suggested that China Mobile has been keen to distribute the iPhone, but dialogue between the companies deteriorated when they where unable to agree on financial terms. In an effort to secure a strong foothold on the smartphone market in the absence of the legal distribution of the iPhone, China Mobile instead launched a copy-cat handset called the OPhone and recently opened the first app store in the country.
While analysts say that the news may shave some edge off of China Unicom’s competitive advantage in the market in the future, the detriment is time-dependent.
According to Howard Hunt, the business development manager at The Hyperfactory, China Unicom’s contract with Apple is still good news for the network, though it has to react to pressure to better engage customers early.
“I don’t see why it would put China Unicom at a disadvantage right now,” Hunt said. “I think there’s definitely a lot to be said about first-mover advantage, so if it can sell a good amount of iPhones quickly and provide a good-quality network, users will have no reason to switch networks in the future.”
Others, however, say there’s no pressure on China Unicom one way or another. “I don’t think lack exclusivity will impact Unicom negatively,” said William Bao Bean, partner at SoftBank China & India Holdings. “Practically speaking one can get an iPhone today in the electronics markets, so exclusivity is irrelevant.”
Hunt also adds that future distribution deals are dependent on Apple’s interst in profit-sharing with teleco companies, which was the hurdle that brought down discussions with China Mobile in 2008. “Apple doesn’t look like its in the mood to make it cheap or easy for anybody, so it’s unlikely another deal with be struck soon,” he said.
China is the globe’s largest mobile market with 687 million mobile subscribers. China Mobile claims 497 million subscribers while China Unicom says it has 139 million and China Telecom has 39 million.
While it appears that China Unicom will be the sole seller of the phone for at least the near future, Apple has confirmed to Western sources that its distribution deal with China Unicom is not exclusive, which could signal good news for other players, including direct competitor China Mobile.
According to reports, China Unicom chairman Chang Xiaobing has said he is confident the company will be the only iPhone distributor in China because the handset operates on the WCDMA standard, which is the platform that China Unicom is exclusively able to operate on in the market. China Mobile operates on the domestically developed TD-SCDMA and China Telecom uses the CDMA 2000 standard.
Apple has not revealed which alternative telcos it is in discussion with but industry insiders speculate China Mobile, which claims as much as 70 per cent of China’s mobile market share, may have resumed talks with the company.
Sources have long-suggested that China Mobile has been keen to distribute the iPhone, but dialogue between the companies deteriorated when they where unable to agree on financial terms. In an effort to secure a strong foothold on the smartphone market in the absence of the legal distribution of the iPhone, China Mobile instead launched a copy-cat handset called the OPhone and recently opened the first app store in the country.
While analysts say that the news may shave some edge off of China Unicom’s competitive advantage in the market in the future, the detriment is time-dependent.
According to Howard Hunt, the business development manager at The Hyperfactory, China Unicom’s contract with Apple is still good news for the network, though it has to react to pressure to better engage customers early.
“I don’t see why it would put China Unicom at a disadvantage right now,” Hunt said. “I think there’s definitely a lot to be said about first-mover advantage, so if it can sell a good amount of iPhones quickly and provide a good-quality network, users will have no reason to switch networks in the future.”
Others, however, say there’s no pressure on China Unicom one way or another. “I don’t think lack exclusivity will impact Unicom negatively,” said William Bao Bean, partner at SoftBank China & India Holdings. “Practically speaking one can get an iPhone today in the electronics markets, so exclusivity is irrelevant.”
Hunt also adds that future distribution deals are dependent on Apple’s interst in profit-sharing with teleco companies, which was the hurdle that brought down discussions with China Mobile in 2008. “Apple doesn’t look like its in the mood to make it cheap or easy for anybody, so it’s unlikely another deal with be struck soon,” he said.
China is the globe’s largest mobile market with 687 million mobile subscribers. China Mobile claims 497 million subscribers while China Unicom says it has 139 million and China Telecom has 39 million.
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