Apple's iPhone to be China's No. 1 smart phone: Unicom

“We're very confident about the market position of the iPhone,” Chang said in an interview in Hong Kong Monday. Unicom, China's second-biggest wireless carrier, started an advertising program for the device this week, he said.

Unicom sold fewer iPhones than analysts anticipated in its debut week after offering the product for as much as 7,999 yuan (US$1,172), compared with US$299 in the U.S. The iPhone faces competition from Nokia Oyj and Research in Motion Ltd., and handsets that run China Mobile Ltd.'s OPhone software in the world's biggest wireless market.

“In some markets where vendors get their marketing right, the iPhone is already the best-selling smart phone,” said Aloysius Choong, a Singapore-based analyst at research company IDC. “Unicom must lower its prices if it wants to access the mass market for the iPhone.”

Chang, 52, said Unicom's iPhone sales since its debut last month “could have been higher.”

Unicom will charge customers 7,999 yuan initially for the 32 GB version of its IPhone 3GS, before refunding all or part of the cost through the duration of the contracts. That's higher than the US$299 paid by customers at AT&T Inc. in the U.S., and Chinese consumers may obtain the handset through unofficial distributors, the so-called gray market, at lower prices, according to consultancy BDA China.

“Gray-market sales won't be very significant,” Chang said. Unicom's sales of the device in China will “definitely surpass” shipments through unauthorized distributors, he said.

Chinese consumers may buy one million iPhones this year from gray-market distributors, adding to the more than 1.5 million already sold through this channel, according to BDA estimates.

The Chinese carrier shipped more than 5,000 iPhones as of Nov. 3, after starting sales on Oct. 30, the company said earlier this month. Apple sold 1 million of its iPhone 3GS device within three days of its June debut in North America

“Sales were acceptable,” Chang said in an interview with Bloomberg Television. Unicom may review its marketing strategy for the iPhone after spending more time to assess sales results, he said.

Chinese consumers bought 11 million smart phones last year, a total that may triple by 2013, according to IDC's Choong. Nokia's E71 and 5800 are among the best-selling models, he said.

Unicom aims to sign up 1 million subscribers to its third- generation mobile-phone services each month, matching the additions in October, when the carrier started the commercial roll-out of its high-speed wireless services, Chang said.

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