Chinese Operator Denies iPhone Sale Plan

Putting an end to rumors that Apple was on the cusp of selling millions of its popular iPhone smartphones to Chinese mobile operator China Unicom, the AP reports a company spokesperson said while China Unicom and Apple were indeed in talks, reports of a deal that would see 5 million iPhones shipped to China are premature.

“Talks between us and Apple have been going on for some time, but no agreement has been reached yet,” Unicom spokesperson Yi Difei told the AP. “There are all kinds of possibilities. There is no particular timetable for the talks.”

The news service also reported that an Apple spokesperson in China, Tiffany Yang, said she had no knowledge of a deal with China Unicom. The company, the world’s third-largest mobile provider, claimed 125 million GSM subscribers and 43 million CDMA (Code Division Multiple Access) subscribers in April 2008. The rumors of an iPhone sale broke after a China Business News report claiming inside sources at China Unicom’s Guangdong subsidiary said Unicom had purchased 5 million handsets for 10 billion yuan, or $1.5 billion (£900m).

As reported in BusinessWeek, Zhou Youmeng, deputy general manager of Guangdong Unicom, told the Chinese newspaper that units might be on the market as soon as September. The report also included an interview with Yu Zhaonan, manager of Guangdong Unicom’s consumer customers department, giving the prices Unicom had paid for the iPhone, claiming a per-unit sales price from Apple of 2,000 yuan ($292.60).

China is the world’s largest phone market; according to market research company Gartner, 180 million phones were sold in the country during 2008. By comparison, sales in North America were 49.1 million units, and for all of Europe, the Middle East and Africa, 229.5 million. Many analysts feel China is the one market Apple must crack if the iPhone is ever going to gain serious worldwide market share or if Apple ever hopes to catch Nokia. Apple’s worldwide market share was 0.9 percent in 2008, compared with Nokia’s 38.6 percent, according to Gartner.

China’s importance to Apple also increases when looking at Apple’s ranking in the niche smartphone category. Worldwide, Apple’s share is 8.2 percent, while Nokia’s share is nearly 44 percent. Smartphones are selling surprisingly well in China, with the pricey mobiles accounting for nearly 8 percent of handset sales, according to Gartner. While the market isn’t nearly so large in North America, smartphone sales are also surprisingly promising, considering the afflicted state of the mobile ecosystem and macroeconomic stability. Gartner reported that smartphone sales jumped 27 percent in the second quarter of 2009, with the iPhone 3GS, Palm Pre and Nokia N97 making their market debuts.

Apple’s expansion into a larger number of countries in the past year has had a pronounced effect on its sales volumes, as have the recent price adjustments for the 8GB 3G iPhone. Sales of 5.4 million units in the second quarter indicated a 51 percent growth in shipments and helped Apple maintain the No. 3 position in the smartphone market.