Apple-China Unicom Deal for iPhone Exclusivity

Cupertino-based Apple and Chinese mobile operator China Unicom are reportedly getting closer to announcing a three-year exclusivity deal for the distribution of the iPhone into the country. It seems that the two have already reached an agreement on the matter, though the deal is expected to be different than the revenue-sharing agreements Apple has with other carriers.

According to the news, the duo might have agreed for China Unicom to buy the iPhones from Apple, while reselling them afterwards to its customers. The price that Apple will receive for each unit has been set at $439, it seems, and a number of one to two million iPhones should be shipped into the country each year. Some early estimations point towards $732 million per year in revenues registered by China Unicom from this deal.

A China Unicom spokesperson has told AFP that, “We have made progress but there are still some problems to be resolved.” For the time being, Apple hasn't commented anything on the deal. However, there are some voices that suggest that a great number of iPhones should be sold in China each year, considering the large number of mobile phone users the country has (687 million at the end of May).

The official Shanghai Securities News, the paper that broke the news on the agreement, also noted that the revenue-sharing part of the deal was the main problem during the negotiations, which had taken more than a year to conclude. While Apple insisted on maintaining the same pattern as with the other carrier deals it had, it seems that China Unicom objected against this.

At the same time, the paper also noted that Apple was, at a certain point, in talks with another carrier in the country, China Mobile, the largest in the world by number of subscribers, yet the negotiations broke off. “iPhone provides strong online experience, which is quite appealing to users,” Dai Chunrong, a Beijing-based analyst with CITIC Securities, is reported to have stated.