China Unicom sells 5,000 iPhones in first weekend

Erica Ogg | Nov 04, 2009

The iPhone didn't get quite the reception in China as it did in other markets.

The mob scene at the iPhone's 2007 debut in San Francisco. The phone's reception in China was a bit cooler.
(Credit: Erica Ogg/CNET)

The exclusive carrier for the device in the country, China Unicom, said Tuesday that it signed up 5,000 iPhone subscribers in the first four days it was available. While that's certainly not a blockbuster opening weekend, the carrier says it's pleased nonetheless.

"We are satisified with iPhone sales so far, and we aim to have an additional 1 million new 3G subscribers each month in the near future," China Unicom Chairman Chang Xiaobing told Reuters.

It's a difficult comparison when you measure the first weekend sales in China against the 146,000 AT&T signed up in the US during the original iPhone's first weekend in June 2007. Besides having to sell the device without Wi-Fi, China has to contend with something US carriers largely do not: A vast market for iPhone knockoffs.

Referred to as gray-market handsets, these are cell phones made in China that are not legally licensed by the government. Manufacturers don't pay taxes on them and they use fake Mobile Equipment Identity numbers. As a result, the phones are cheaper and can be used with prepaid wireless accounts, and, perhaps unsurprisingly, they're increasingly popular.

China's gray-market phone shipments are expected to reach 145 million units this year, a 44 percent increase over the 101 million shipped in 2008, according to market research firm iSuppli. For perspective, the worldwide (legally licensed) cell phone market is 1.13 billion, so the 145 million is a sizable chunk of that, almost 13 percent.

Still, Apple analysts are already calling the phone's debut in China "a disappointment." Piper Jaffray's Gene Munster said he was expecting China to contribute 1 million to 2 million iPhone sales to the worldwide total of unit sales for next year. Based on the weak opening numbers, he is revising China's contribution to 550,000 next year.

China is also in the middle of building out more of its 3G network, so it could take time before devices like the iPhone truly takes hold, the way it has in other markets.

"We believe that eventually China will emerge as a major market for iPhone sales," wrote Jaffray in a research note Tuesday, "but it could take a year or two to gain meaningful unit traction as it did in the US."

Originally posted on Circuit Breaker

Filed under: Mobile Phones
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