What’s the deal with Unicom and the iPhone exclusive for China?

The rumour is currently buzzing around the net that China Unicom will be announcing an exclusive deal for the iPhone on Friday. If it’s true, how valuable will that deal be for the smaller operator? What makes this story somewhat amusing (for me) is how vehemently both parties denied this back in August.

What’s the story?

It has been reported that not only is Apple finally about to overcome the final hurdles to selling the iPhone in China, but that the operator that will carry the phone is China Unicom. Sources “close to the deal” report that Unicom will announce a deal this Friday, and that the iPhone could be on sale in China by October.

How big a win is this for Unicom?

There’s no doubt that this is a big deal, but it’s not going to be a guarantee of success for China Unicom. If you look at the closest market to China, the arrival of the iPhone in Japan didn’t exactly set the country alight. Softbank, Japans second largest operator, won the contract and immediately saw it’s new subscribers increase… a bit. In the months since then the dominant operator, NTT DoCoMo, has caught up with and then passed out Softbank in terms of new subscribers. It did this through good value deals with short contracts.

Now, in China, things are a bit different. Unicom hasn’t been launching a huge range of its own touch-screen smartphones, like China Mobile has. So it looks a lot like Apple has gone with the operator it could put more pressure on. Does China Mobile really NEED the iPhone? Not really. How about China Unicom?

What we think?

Apple is the real winner here. The arrival of the iPhone in China will shake things up a little, but I doubt it will make any huge difference to either Unicom or Mobile. The company with the most to gain here is the maker of the “Jesus phone”. Some analysts predict that up to 3 million iPhones could be sold in China by the end of 2011. At the moment, marginally over 5% of Apples global sales come from the Asia Pacific region. With so few of its sales coming from the worlds largest mobile market, you can bet Apple has been pushing hard for someone to start selling the iPhone in China. And while China Unicom is trailing behind the lead operator in China, it’s also a huge operator by Western standards. I would absolutely love to see the terms of this contract (if it exists). I bet that Apple can get far more favourable conditions with Unicom than it could with China Mobile, and it will still be able to shift a vast number of devices.

Things could easily go in the other direction, though. Apple is under pressure to sell devices in China before other touch-screens fill the market and the iPhone is no longer relevant. You have to wonder just what Apple has had to agree to in order to get units on shelves. As we’ve seen from the FCC story, it’s far more likely that AT&T has been throwing it’s weight around with Apple than the other way around.