China Unicom is now accepting pre-orders for the iPhone 4 in China and announced that users will have to pay 5,880 yuan to 6,999 yuan ($874 to $1,040) upfront to get an iPhone with a deposit toward two years of service.
The prices are similar to what the carrier was charging for the iPhone 3GS when it launched officially in China last October . Sales have picked up after a slow start, but the iPhone has yet to reach the kind of demand in China that it has achieved in the U.S. and other markets. As of the second quarter, Apple ranked fifth in the smartphone market with 7.1% share of sales.
Shaun Rein, managing director of China Market Research Group, says it will take more for China Unicom to lure users away from service provided by its competitor, the biggest carrier in China, China Mobile. The expensive price “doesn’t give them incentive to switch away from China Mobile,” he said.
All three of China’s mobile carriers have been racing to launch devices that will attract more users as well as entice those users to spend money on high-speed data services.
According to surveys of young mobile subscribers in China by CMR, people are reluctant to switch to China Unicom because of perceptions that the company has unstable voice service, because Chinese consumers are unwilling to sign long contracts with mobile service providers, and because they don’t want to give up their China Mobile phone numbers.
This is partially the reason why analysts estimate that millions of people have purchased gray market iPhones and are using them with China Mobile, without 3G service. Apple also sells unlocked iPhone 3GSes in its stores (an 8-gigabyte iPhone 3GS costs 3,999 yuan ($594) in Chinese Apple Stores) and could likely sell the iPhone 4 unlocked, as well.
Still, if 3G-enabled iPads—which have already made their way into China unofficially —become widely available here, China Unicom may benefit from high interest in Apple’s tablet computer. Whereas the iPhone, which didn’t officially launch in China until last fall, has plenty of competition, Apple’s major competitors have yet to release products comparable to the iPad here and users won’t be concerned with phone numbers when signing up for 3G services for their iPads.