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After one years negotiation, Apples iPhone finally came into Chinas market with the help of China Unicom.

On August 28, 2009, the US-based laptop, cellular phone and portable music player producer Apple and the China-based communication technology operator China Unicom declared simultaneously that they had reached an agreement on selling Apples iPhone in China. According to the agreement, whose validation term is 3 years, iPhone will be available in Mainland China in the fourth quarter of this year.

Mr. Chang Xiaobing, Board Chairman of China Unicom, made an introduction about the agreement after the China Unicom achievements press conference. He said that China Unicom introduced iPhone 3G and iPhone 3GS. The Chinese Ministry of Industry and Information Technology (MIIT) gave the official permission to iPhone on August 28. Previously, a source from Guangdong Unicom (a branch company of China Unicom in Guangdong) said that China Unicom spent 10 billion yuan (USD 1.46 billion) in buying 5 million units of iPhones. However, the headquarters of China Unicom denied these words.

According to Mr. Chang, China Unicom doesnt plan to buy so many iPhones for one time; instead, it will buy them in batch. Moreover, the Chinese iPhone fans may feel disappointed that the first batch of iPhones sold by China Unicom will not have the Wifi fuction, which is required by the relevant regulations. “During the negotiation, we always thought of the marketing methods of iPhone in the foreign countries and the status quo of the Chinese market, to design a marketing program for iPhone in China. Frankly speaking, we will fix rational prices for the iPhones sold in China.”

Mr. Chang laid emphasis on the “rational prices”. But the detailed allowance program has not been determined. Based on the operating conditions of iPhone distributors around the world, the average revenue per user of 3G iPhone will be increased. The same thing will happen to the Chinese market. The introduction of iPhone, if successful, will be helpful for China Unicom to change the structure of its 3G users.

The iPhones will be sold in the business halls of China Unicom at the end of September or the beginning of October, together with the coming of China Unicoms WCDMA application. Without the function of Wifi, the price of the first iPhones will be 2,999 yuan (USD 439.07). In addition, 3,000 yuan (USD 439.22) will be paid as the reserved communication fees. The iPhones with 16G capacity or 8G capacity will be available at the same time. The price will not double as the capacity does.

On the Website of the MIIT, people can find that the permission was given to the A1324 and A1325 iPhone 3G on August 17. A source from China Unicom, the Wifi function of the first batch of iPhones, which are sent to the government department for approval, was removed to shorten the approval process. However, China Unicom plans to resume this function in the second batch of iPhones.

When iPhone officially comes into the Chinese market, Apple will be responsible for the after-sale service like maintenance and technological support. In addition, it will take part in some marketing activities, including the setup of the special image area, selection of distributors and management over the product supply chain.

After China Telecoms “Sky-Wing” and Chine Mobiles “G3”, China Unicom introduced the new business “WO” on April 28, which will cover all the businesses of China Unicom including mobile communication, fixed-line telecom and ADSL. Now, China Unicom mainly focuses on the 3G business.

With the coming out of three communication technology operators 3G businesses, the competition in this industry is more and more furious.

Before the startup of 3G business, China Unicom, which was previously deeply hurt by the inside competition between its GSM and CDMA, was worried about the possible impact from the WCDMA on its GSM business. Actually, in order to promote the 3G business, China Mobile and China Telecom give out favorable conditions. China Unicom primarily positions the GSM as the low-end business while the WCDMA is positioned as the high-end.

According to an expert of the Chinese 3G market, the WCDMA industry chain is more complete than the CDMA and TD-SCDMA. In China, more than 55 cities will apply 3G technology. The potential in this market is huge, attracting not only the domestic operators, but also the international giants in communications.

With the worldwide fame, iPhone will undoubtedly give a big hand to China Unicom in the competition of 3G market. Meanwhile, huge profits await Apple if the marketing activities are successful. With the introduction of iPhone, Apple will gain more fame in China, which will promote the sales of its iPhone and iPod, as well as the Apple laptop. Therefore, it is a win-win strategy for China Unicom and Apple.