China Unicom confirms iPhone deal as Telecom talks to Palm

As predicted earlier this week, China Unicom has confirmed that it will be exclusively selling the iPhone in China. This has ended months of speculation about the fate of the smartphone in China - and China Telecom didn’t want to feel left out. It has announced today that it is in negotiations with Palm about a possible Chinese device, as well as continuing talks with RIM.

China Unicom and Apple:

The deal announced today is a three-year contract. Unicom will be buying the devices completely from Apple, and selling them itself. Unlike many other Apple contracts, there will be no revenue sharing between the two companies. The iPhone should be on shelves in China during Q4 2009, and while pricing details haven’t been released yet, Unicom has said that it will subsidise the cost of the handset.

Telecom and Palm:

China Telecom seems particularly interested in importing popular smartphones from Europe and America. It announced today that is in talks with Palm about possibly bringing the Pre to China - or a device they might develop together. The operator also mentioned it is still in talks with RIM to bring the Blackberry to China. An “industrial relations representative” made this announcement, but wouldn’t give any further details. Or there may not have been any other details to give.

What we think?

Unicom and Apple: If earlier rumours are true, then Unicom has bought 5 million handsets from Apple. Whether or not they will sell them all is a different matter entirely. Either way, it’s not Apples problem anymore. Since the units were bought wholesale from the American company, it can now dust its hands off and count the profits. Its up to China Unicom to make the iPhone a hot item amongst Chinese consumers now. It has already started well, by announcing it will subsidise the price of the handset. Getting as many iPhones into the hands of users as possible is important - the next step (hopefully) will be for Unicom to announce decent contracts and generous data rates.

Telecom and whoever: this really does smack of “uh oh, better get a release out so that Unicom isn’t the only operator with news today.” Frankly, Telecom has missed the boat already. There was a chance to be taken here, and Telecom didn’t take it. Smartphones are going to sell more and more units as 3G becomes more established in China. The opportunity was there to launch 3G handsets and try to have the big hit on your network BEFORE the iPhone reached China. Now, the iPhone is not guaranteed to succeed. It might not catch on with Chinese users. But China Mobile proved it was serious about maximising its chances for success by launching and announcing as many 3G handsets as possible - something that Telecom has not been as active in doing. Sure, Telecom announced a massive handset spending spree earlier this week, but it still seems like too little, too late.