China Unicom Expects iPhone to Become Best Selling Smartphone in China

November 17th, 2009 at 5:22 PM - News by Bryan Chaffin

Though China Unicom may have only sold about 5,000 iPhones in the first weekend of availability, the company's chairman, Chang Xiaobing, told reporters Tuesday the he expects the device to become the country's top-selling smartphone.

Bloomberg reported the comments, which were made in the first press conference by the company since the device's launch late in October. There, he told reporters, "We're very confident about the market position of the iPhone."

Mr. Chang didn't offer details on how this would happen, nor how his company would overcome the obstacle of the device's retail price tag, where the 32GB iPhone 3GS sells for 7,999 yuan (US$1,172). Like many emerging markets, China's cellphone market is not based around a carrier-subsidy model. Consumers usually pay the full price for their mobile devices.

In the U.S. and many European markets, carriers subsidize the price of the iPhone in the form of direct payments to apple. So, while the U.S. price of the 32GB iPhone is $299, Apple is getting as much as $400-$500 in payments from AT&T once the phone is activated.

As is the case with other U.S. carriers, AT&T expects to make back that money and earn a profit over the two-year lifespan of the required contract necessary to get that price. Even with China's booming economy of the last 10-15 years, $1,000 is a steep price to pay for a mobile device.

The initial sales numbers of 5,000 iPhones in the country, which is the world's largest cellphone market, were considered disappointing by analysts in Asia and the West alike.