Ninety-six percent of survey respondents said Unicom's prices on iPhones were unreasonably high. [China Daily]

China Unicom, the No. 2 mobile phone service operator in the country by number of subscribers, said on Monday that it would start selling the iPhone in China from next month.

Experts said the high package fees that China Unicom requires may thwart the success of Apple Inc's popular smart phone in the world's largest mobile population.

A retail price of about 5,000 yuan is expected to be levied, higher than the earlier estimates of about 2,000 yuan.

The company, which signed a three-year deal with Apple to sell iPhones in China, will offer a choice of eight different service packages with the phone, ranging from 126 yuan to 886 yuan per month.

China Unicom hopes Apple's flagship handset could help it attract high-end users in a market where China Mobile, the biggest mobile service operator in the country, dominates.

The price does seem to be an obstacle for some potential users.

Qiu Xueying, a 28-year-old woman from a domestic publishing company, said she was very interested in buying an iPhone because she likes its design and appearance. But she said China Unicom's price was too high and she would continue to use her current Nokia handset instead.

According to a survey by China's largest news portal, 96 percent of respondents think China Unicom's pricing of iPhone is "unreasonable". About 86 percent of the respondents said they would not buy an iPhone for cost reasons.

The iPhone will be sold in Apple retail outlets, through China Unicom's own network of stores and through major independent retailers, Unicom said. The company is also developing an online application store based on Apple's model.

Apple had been in talks with China Mobile over the introduction of iPhones in China since 2007. The company later turned to China Unicom, which adopted the 3G standard that Apple's iPhone3G and iPhone 3GS support.

China Mobile said earlier that it was still in talks to sell iPhones in China, as China Unicom's deal with Apple is not exclusive.

Wang Yuquan, senior consultant at Frost & Sullivan, said China Unicom was unlikely to give large subsidies to handset makers because it adopted the WCDMA standard, which is believed to be the most mature 3G technology which gets wide support from mobile manufacturers across the world.

He said China Mobile and China Telecom have to invest greatly in handset subsidies as there are fewer mobile phone vendors that support the TD-SCDMA and CDMA 2000 standard that they respectively deployed.

(China Daily September 30, 2009)