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China Unicom gaining in iPhone war

China Unicom gaining in iPhone war

Ever since China Unicom introduced the Apple iPhone to China last month, pessimists have been predicting doom. The Chinese don’t want and can’t afford 3G service according to various analysts and experts.

Well, it’s true that there weren’t lines around the block at China Unicom stores when the iPhone went on sale in October. And it is true that a retail market iPhone sells for an amount approaching a month’s salary for many average Chinese. But that doesn’t mean there isn’t a demand.

As we have pointed out previously, there are countless millions of “jailbroken” iPhones already in use in China. The term “jailbroken” means the phones have been hacked to allow access to the China Unicom 3G system.

Today we see the results of iPhone sales and iPhone usage on China Unicom. The company says Average Revenue per User (ARPU) is up sharply with 3G users.

The company’s current monthly average revenue per user for its third-generation mobile services is over 100 yuan, and is showing a month-on-month growing trend. China Unicom says 3G subscribers and revenue from 3G operations are also increasing month on month.

Only weeks earlier CLSA Asia-Pacific Markets (a major Asian brokerage and forecasting firm) said the market for 3G is showing little in the way of increases so far, but competition does seem to be rising. “I think there will be a 3G price war in China,” Francis Cheung, head of Asia Telecoms at CLSA Asia-Pacific Markets told MarketWatch.

Cheung said the era of fast growth in revenues is over, with the industry now set to struggle against “commodity-like” tariff pricing, where rates differ little between competitors.

Actually there is a consumer level difference among 3G services in China. China Mobile is using a homegrown smartphone protocol which appears to be less popular with 3G users. China Mobile subscriptions have been below expectations.

China Unicom appears to be generating more revenue with its iPhone-centered marketing and software development. The giant telecom company is planning on increasing the number of its 3G mobile users by more than 1 million a month and is developing mobile applications for its 3G devices.

The China Unicom app store will generate a lot of buzz and could become a significant, under-projected revenue source.

[Thanks: http://www.stockmarketsreview.com]