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Rumor: China Unicom to Purchase 5 Mln iPhones

China Business News, 8/12/09

At the signing ceremony for China Unicom's (NYSE: CHU; 0762.HK; 600050.SH) agreement with Carrefour to establish 3G service halls in the retail chain's Guangdong stores, reporters caught sight of the soon-to-be-released Unicom model of iPhone. Guangdong Unicom's customer development manager, Yu Zaonan, revealed that Unicom has reached a final settlement for a one-time purchase of 5 mln WCDMA-enabled iPhones from Apple at a price of RMB 2,000 per handset, and that "RMB 10 bln for the purchase has already landed in Apple's pockets." Yu said that the Unicom edition of the iPhone will not retail for much higher than Unicom's purchase price, with "8G models retailing for around RMB 2,400, and 16G models at around RMB 4,800," and that he did not deem it unlikely that "once the iPhone hits the market, Unicom headquarters will push bundled service packages such as free handsets with purchase of calling credit."

Contract manufacturing sources revealed that a bare iPhone costs between RMB 1,000 - 1,100 to produce. Guangdong Unicom deputy general manager Zhou Youmeng said the first batch of Unicom iPhones would make a leading appearance in September at Unicom's Carrefour 3G service halls and select top independent service halls. A source inside Guangdong Unicom who wished to remain anonymous revealed that Unicom would not share iPhone profits with Apple. Customer development manager Yu said that a batch of Unicom iPhone trial models were already being distributed among Guangdong Unicom's employees for training in use of the new model's operating system, and that based on Guangdong Unicom's internal test use, they had not yet discovered any glaring network or technical faults in the handset.

A Unicom spokesperson said that he had not yet received confirmation of a final agreement between Unicom and Apple, and could not comment on the rumor.

Keywords: Yu Zaonan supply contract Zhou Youmeng Guangdong Unicom China Unicom iPhone retail wireless Carrefour Apple 0762.HK 600050.SH CHU bundling pricing handset smartphone


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