New China Unicom iPhone model, sans Wi-Fi, given approval

Posted:
in iPhone edited January 2014
Reports of regulatory approval of a new model of the iPhone in China seem to confirm that Apple's hardware will appear on the China Unicom network, and also suggest that a new model was created for the country of over 1 billion.



The new iPhone is reportedly a GSM/WCDMA model that operates on the 900MHz, 1700MHz and 1900MHz bands. It also includes Bluetooth, but no Wi-Fi. It was approved on May 7, according to a China's State Radio Regulatory Commission filing discovered by Engadget. The phone has been approved for use in China for the next five years.



This week, reports surfaced that suggested a deal had been reached between Apple and China Unicom, but officials close to the matter quickly intervened to say the deal was not final.



News on the phone from China, as translated by iPhoneinChina.com, suggests the new model could fall under the Unicom WCDMA standard.



China Unicom runs a GSM/UMTS 3G mobile network using the same signaling technology at AT&T in the U.S. and most other carriers worldwide. Existing iPhone models are already compatible with China Unicom's network, though WCDMA is a third-generation GSM technology.



Pictures of the new Chinese iPhone show a 16GB model that operates on the 3G spectrum. The Hong Kong model includes English text on the back, and says the model is WCDMA .







Details of the China Unicom deal leaked this week reportedly set a minimum threshold of CNY 5 billion ($731 million) in iPhone sales, guaranteeing orders of one to two million devices per year. The source said China Unicom could begin selling the iPhone as early as late September. China Unicom is also rumored to pay Apple 3,000 CNY ($439) per unit and price it below that for customers, Unicom promises to sell a minimum 1 million units per year, and the Chinese iPhone will access "Apple's China App Store."



In February, China Unicom was fingered as Apple's most likely partner by British consulting firm Ovum, followed by a leak of iPhone information inadvertently posted by China Unicom's website and an admission by the company that it was in talks with Apple in March. Earlier this month, Analyst Shaw Wu of Kaufman Bros. similarly claimed that China Unicom would be the frontrunner in marketing Apple's phone in the country.







With over 135 million subscribers as of February 2009, China Unicom is 170% larger in terms of users than AT&T in the US, but it is still China's second largest mobile carrier after the state-owned giant China Mobile, which boasts 471 million subscribers, making it the world's largest carrier by number of subscribers.



The vast size of the Chinese market has kept observers intently interested in how and when Apple would officially enter the market with the iPhone. On its recent earnings call, Apple executives only said they planned to begin selling the iPhone within the next year and described the negotiations as a "priority project." That may have been cover to keep its negotiations productive as Apple pitted the Chinese carriers against each other to gain the best deal.



In addition to phone network compatibility, China Unicom may be more open to allowing Apple to run its own software store and retain control over iPhone features such as WiFi and Bluetooth. In contrast, China Mobile has expressed an unwavering demand to exclusively operate its own mobile software store, a stance also adopted by Verizon in the U.S.
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Comments

  • Reply 1 of 31
    zunxzunx Posts: 620member
    Excuse my ignorance, but why not Wi-Fi?
  • Reply 2 of 31
    chillichilli Posts: 40member
    Because they don't want to let people sharing informations in P2P mode.

    This decision is political... sms, email, everything should be filtered.



    Quote:
    Originally Posted by zunx View Post


    Excuse my ignorance, but why not Wi-Fi?



  • Reply 3 of 31
    MacProMacPro Posts: 17,274member
    I am thinking AAPL might benefit from a billion sales ...

    Also will be nice to see a US product (albeit made in China) sell in China in volume. Maybe Apple can help close that trade gap.
  • Reply 4 of 31
    ajitmdajitmd Posts: 365member
    I am wondering if it makes sense to invest in China Unicom ADR (CHU). Right now, China Mobile has the largest customer base with its GSM network that will be upgraded to their version of 3G called TD-SCDMA. This standard is used in China only and was created to bypass QCOM CDMA and UMTS patents. I am not sure the network tech is stable enough, especially the handsets. More likely, the selection of handsets will be limited and at a higher price.



    It does look like CHU would have the technology advantage and now they are likely to go with the iPhone. As we know, the iPhone has been driving subscriber growth at ATT and other carriers. It could do the same for CHU. Like the article says, CHL has 3.1x the subs of CHU. PSR for CHU is 3.5, versus 1.45 for CHU. Also big difference in gross margins.



    I know I am missing something... any opinions here?
  • Reply 5 of 31
    virgil-tb2virgil-tb2 Posts: 1,416member
    Quote:
    Originally Posted by Chilli View Post


    Because they don't want to let people sharing informations in P2P mode.

    This decision is political... sms, email, everything should be filtered.



    I wonder how much fascism will creep into the "China App Store"?



    For instance even though the developers have yet to make any decent programs that use it, iPhones are aware of each others existence and could easily exchange information over bluetooth if the software was written for it. In the case of a government crackdown a sort of daisy-chain among sympathetic iPhone carriers with the right software could transfer information and pictures out of the massacre and distribute them widely.



    Total dumb-ass move from a "we need to develop our country" point of view forcing Wi-Fi off the device also. If millions of citizens used Wi-Fi it would drive the adoption of the technology and sales of routers etc.
  • Reply 6 of 31
    virgil-tb2virgil-tb2 Posts: 1,416member
    Quote:
    Originally Posted by digitalclips View Post


    I am thinking AAPL might benefit from a billion sales ...

    Also will be nice to see a US product (albeit made in China) sell in China in volume. Maybe Apple can help close that trade gap.



    A billion is a bit high to expect. It's not like every single person in the USA has an iPhone, it will be the same in China. Great sales but not a billion.
  • Reply 7 of 31
    jeffdmjeffdm Posts: 12,946member
    Quote:
    Originally Posted by Chilli View Post


    Because they don't want to let people sharing informations in P2P mode.

    This decision is political... sms, email, everything should be filtered.



    You mean in an ad-hoc network? Because China filters the internet too.
  • Reply 8 of 31
    maestro64maestro64 Posts: 4,098member
    Quote:
    Originally Posted by digitalclips View Post


    I am thinking AAPL might benefit from a billion sales ...

    Also will be nice to see a US product (albeit made in China) sell in China in volume. Maybe Apple can help close that trade gap.



    Nope will not help, since the product are not made here nor sold out of the US no $ flow back the US. Apple like most large companies set up off short companies so they do not have to recognize international sales in the US. Apple Parks all this money in the Cayman Islands
  • Reply 9 of 31
    ajitmdajitmd Posts: 365member
    Quote:
    Originally Posted by Chilli View Post


    Because they don't want to let people sharing informations in P2P mode.

    This decision is political... sms, email, everything should be filtered.



    I am wondering if the China Unicom phones will be crippled via software or hardware? If it is a software block, it could be hacked. I think it is idiotic for the bureaucrats in Beijing to think that just because they cripped WiFi in the iPhone, it will keep people from doing P2P or even connecting with news outside the country. I got to believe that they got to have a thriving smuggling business in phones and other equipment that incorporates WiFi plus other internet tech.



    They got as much chance of keeping WiFi from their country as we got in keeping pot from coming into the country or even being grown here. It is about supply, demand and price.
  • Reply 10 of 31
    anantksundaramanantksundaram Posts: 18,472member
    Without wifi, I doubt that it's going to sell that well. Perhaps this is just a foot-in-the-door type move - there's always hope of a newer version down the road that may include the functionality.



    In the meantime, there'll still be a huge market for the regular, hacked iPhone.
  • Reply 11 of 31
    FYI:



    Just to add, Twitter and Blogspot are also blocked in China.
  • Reply 12 of 31
    aaarrrggghaaarrrgggh Posts: 1,557member
    Quote:
    Originally Posted by AjitMD View Post


    I am wondering if it makes sense to invest in China Unicom ADR (CHU). Right now, China Mobile has the largest customer base with its GSM network that will be upgraded to their version of 3G called TD-SCDMA. This standard is used in China only and was created to bypass QCOM CDMA and UMTS patents. I am not sure the network tech is stable enough, especially the handsets. More likely, the selection of handsets will be limited and at a higher price.



    It does look like CHU would have the technology advantage and now they are likely to go with the iPhone. As we know, the iPhone has been driving subscriber growth at ATT and other carriers. It could do the same for CHU. Like the article says, CHL has 3.1x the subs of CHU. PSR for CHU is 3.5, versus 1.45 for CHU. Also big difference in gross margins.



    I know I am missing something... any opinions here?



    My guess is that qcom is the bigger winner, if Apple intends to pay royalties. I think CHU has big infrastructure upgrades needed to handle the iPhone, if they get a few million on their network.
  • Reply 13 of 31
    constable odoconstable odo Posts: 1,041member
    Is a million iPhone unit sales a year in China too much to hope for? The Chinese love using the internet. Millions of Chinese have their own internet connections. There is plenty of cybercafe usage. Younger Chinese love playing games. It does seem there is very good potential for the iPhone to gain traction if it's not priced too high. Singaporeans seem to like the iPhone.



    What was bugging me yesterday, was an article I saw about how poorly the iPhone was doing in Russia. That sort of surprised me, but I'm hoping it was due to the poor economy rather than them just not liking the iPhone. I'm guessing that China has a better economy than Russia and the people are much more interested in the internet and have the infrastructure to exploit it. I'll be happy even if the iPhone is just a moderate success. Even 1% of China Unicom subscribers is a decent goal which would equal just over a million iPhones sold a year. I've heard conservative estimates much higher than that, but I'll take them with a grain of salt.
  • Reply 14 of 31
    ajitmdajitmd Posts: 365member
    Quote:
    Originally Posted by aaarrrgggh View Post


    My guess is that qcom is the bigger winner, if Apple intends to pay royalties. I think CHU has big infrastructure upgrades needed to handle the iPhone, if they get a few million on their network.



    I agree that on paper, QCOM should be the company benefiting the most from the smart phone and even 3G trend. Their standard royalty is about 5.5% of the ASP for CDMA phones and even UMTS/WCDMA phones. My understanding is that Apple pays that royalty plus what they pay to the GSM IPR holders.



    However, QCOM share of royalties has been diluted for several reasons. Nokia fought them in court and got the rate reduced in return for GSM IPRs that QCOM needed. Another similar deal with TXN, BRCM. China got a reduced royalty rate for domestically made phones of local use. A lot of side deals. Meanwhile, the overall Average Selling Price (ASP) of the CDMA/EVDO, UMTS/3G phones has been falling. The hypergrowth, except for smartphones is over with... so QCOM revenues and profits have not been impressive.



    I have some issues about their management. They keep on making scatter brain "investmetns" that have to be written off. They are still reporting "proforma earnings". They make great gross and net margins (at least proforma). No debt and hi cash flow. The problem is that issue a lot of shares via stock options to management. Management is always selling shares. This has been going on for years. The buy backs of shares by the company are nothing but transfer of wealth from shareholders to management. Last but not the least, Jr got to run the company. I had quite a few shares starting in Oct-1998 and it was a huge run and did ok, but did not sell at the best price. Apple has been a better investment and they are in tornado.
  • Reply 15 of 31
    nasseraenasserae Posts: 3,152member
    I am not surprised. Apple has been selling the iPhone in Egypt without GPS because you are not allowed to have GPS there. However, they disabled GPS by software not by hardware. But why no WiFi?
  • Reply 16 of 31
    There is not a good credit score system in china, so it is very easy for people to buy subsidized iPhone and break contract immediately. With Wifi removed, China Unicom doesn't need to worry about that ---- you don't buy an iPhone for phone calls only. However, it will be a heavy test for China Unicom's 3G network. People love internet.

    I'm interested to see what the price will be.
  • Reply 17 of 31
    kennmsrkennmsr Posts: 95member
    Quote:
    Originally Posted by AjitMD View Post


    I am wondering if the China Unicom phones will be crippled via software or hardware? If it is a software block, it could be hacked. I think it is idiotic for the bureaucrats in Beijing to think that just because they cripped WiFi in the iPhone, it will keep people from doing P2P or even connecting with news outside the country. I got to believe that they got to have a thriving smuggling business in phones and other equipment that incorporates WiFi plus other internet tech.



    They got as much chance of keeping WiFi from their country as we got in keeping pot from coming into the country or even being grown here. It is about supply, demand and price.



    IMHO I think the restriction was orchestrated by the Government and it's Gov't run carrier China Mobile. It might be a big brother issue wanting to restrict the populace from truly communicating with the outside world. But in reality it's China Mobile trying to get it their way, Gov't controlled App Store, Phones that only work in China using China Mobile's government-supported TD-SCDMA, and killing the competition by forcing it to overtax it's wireless network by allowing cellular connection. Jjust look at what has happened to AT&T, and they allow WiFi to the extent of providing FREE WiFI hotspots across the country. Can anyone say bring China Unicom network to it's Knees and frustrate all CHU subscribers. If AT&T can't readily upgrade it's Network to meet the demand of a couple Million iPhones how is a country that is just emerging into the 20th century going to handle possibly 10's of millions of subscriber demands. Result - Network meltdown.
  • Reply 18 of 31
    Quote:
    Originally Posted by iPhoneinChina View Post


    There are some reports that the hardware for the Chinese iPhone is customized for China. While the rest of the world gets the 3G with the factory codename of 82, 3GS codenamed 88, the China iPhone gets a separate codename of 90. This leads me to believe that it is indeed not a software cripple. I suspect mainly because the Chinese are already experts at and accustomed to jailbreaking the million or so iPhones already available.



    I?d wager it is a specialized HW build. Since the price is listed as around $440 USD for the 16GB Model, which is more around $600 USD for the rest of the world, I?d also wager that at least some of the other HW aspects are likely ?inferior" to the 16Gb iPhone 3GS. It?ll be fun to see the tear down and comparison of parts.
  • Reply 19 of 31
    dluxdlux Posts: 666member
    Quote:
    Originally Posted by JeffDM View Post


    Quote:

    This decision is political... sms, email, everything should be filtered.



    You mean in an ad-hoc network? Because China filters the internet too.



    As long as the 'internet' runs through state-owned routers, it's not exactly ad-hoc.



    Pure (encrypted) peer-to-peer networks operating over wireless would evade the ISP monitors, but the mere presence of a WiFi signal could be all that's needed to run into trouble. And it's not like that is difficult to detect.
  • Reply 20 of 31
    Quote:
    Originally Posted by Dlux View Post


    As long as the 'internet' runs through state-owned routers, it's not exactly ad-hoc.



    That is what JeffDM said. P2P almost always runs through the internet so that would be filtered. Ad-hoc is what Chilli was actually referring to as a bad thing since there would be no router involved so information could be passed freely without scrutiny.
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