Apple Taking iPhone To ChinaApple Taking iPhone To China

Apple has struck a deal to sell the iPhone in China, and the move will enable it to capitalize on a large and untapped market.

In a news conference Friday, China Unicom said it has reached a three-year deal with Apple to sell the touchscreen smartphone in the fourth quarter. The companies did not specify which models would be sold or how much they would cost, but the Chinese iPhone will lack Wi-Fi to comply with government regulations. The handset will be 3G-capable, and the carrier said it will be subsidizing the smartphone.

Apple has been trying to get the iPhone into China for more than a year, and the iPhone's release should coincide with China Unicom's rollout of 3G networks. The wireless operator plans to have 3G coverage in 335 cities by the end of the year, and Apple's device could be a key driver of mobile data adoption.

China Unicom is the country's second-largest wireless carrier, and it has more than 125 million subscribers. While this lags far behind China Mobile's nearly 500 million customer base, it surpasses the users of AT&T or Verizon Wireless by more than 40 million subscribers.

China is becoming increasingly important in the mobile world because it has roughly 700 million subscribers, and there is plenty of room for growth. Most of these subscribers use entry-level handsets for calling and sending texts, but users are quickly upgrading to more sophisticated devices capable of surfing the Web, sending e-mails, and playing multimedia files.

Research firm BDA China estimates there are already more than one million iPhones in the country that have been brought in from other markets, and there are countless knockoff iPhones for sale.

The move also comes as China Mobile is planning to bring out a slate of devices with similar smartphone capabilities. The world's largest carrier by subscribers is planning to use the Google-backed Android operating system to create its Open Mobile System OS, and companies such as Dell, Lenovo, and HTC are likely to have "OPhones" for sale before the end of the year.

Register for Interop New York and gain a complete understanding of the most important innovations in Interop's comprehensive conference and expo, where you'll see the full range of IT solutions to position your organization for growth. At the Jacob Javits Center, Nov. 16-20, 2009. Find out more and register.