(Updates with analyst comment, background)
By Joanne Chiu and Langi Chiang
BEIJING, March 4 China Unicom (Hong Kong) Ltd
(0762.HK) chairman Chang Xiaobing said on Wednesday the company
was in talks with Apple Inc (AAPL.O) to introduce the iPhone to
"We are in talks with many handset suppliers, including
Apple," the chairman told reporters.
Rival China Mobile (0941.HK) was negotiating with Apple to
sell the iPhone in China, but has so far not announced any
China Mobile chairman Wang Jianzhou also said on Wednesday
his company would continue to talk to Apple and he would not
comment on the discussions between China Unicom and Apple.
"3G users will account for 20 percent of all mobile phone
users in China in the next three years," Chang said on the
sidelines of a meeting of the parliament's advisory body.
Analysts said the possible Apple deal may not necessarily be
an earnings catalyst for China Unicom given that the Apple brand
is not particularly strong in China and there are various local
copies of the product available in the market.
"iPhone copies (i.e. the Hi-Phone) are available without
(users) having to sign long-term contracts," JP Morgan analysts
Jimmy Cheong and Tim Storey said in the note.
"iPhone is likely to be highly subsidised and China Unicom
may give away large revenue share so earnings upside is possibly
limited, in our view. We think this is a reason why China Mobile
has refused to sign with Apple to date."
Moreover, many people in China already use actual iPhones
that have been brought in through private channels even though
they have not been formally introduced in the country.
(Additional reporting by Nerilyn Tenorio; Editing by Kirby Chien
and Ken Wills)