Apple iPhone meets China's UPhone
Apple partner China Unicom will start selling its own smart phone later this year.
By James Rogers, TheStreet
Bloomberg reports that China Unicom will launch the UPhone, underlining the challenges Apple faces in the increasingly competitive Chinese phone market.
Despite the iPhone's phenomenal success in the U.S. market, Apple is up against a host of heavyweights in China, including smart phones from Lenovo Group and China Mobile, as well as Taiwanese giant HTC.
Zhang Zhijiang, the head of China Unicom's technology department, told Bloomberg that the phone will use a "totally new" Linux-based operating system and is being developed by Okwap, Huawei Technologies and ZTE. The company has been selling Apple's iPhones since late last year.
Apple has so far struck a positive tone about its Chinese business. During the consumer giant's recent fourth-quarter conference call, Peter Oppenheimer, Apple's CFO, said the company is "very pleased" with customers' response to the iPhone 4 in China. Oppenheimer also noted that the company's four Chinese retail stores are seeing the most customer traffic of any Apple stores.
Bloomberg, however, reports that China Unicom is struggling to capitalize on its exclusive iPhone deal, with the company reporting four straight quarters of profit drops.
As the world's most populous nation, China presents a great opportunity for smart-phone makers such as Apple and HTC, particularly as the country undergoes rapid economic growth.
China was the world's second-largest smart-phone market during the second quarter of 2010, according to research from Canalys. Some 6.9 million smart phones were sold in China during the quarter, and the number is expected to explode during the coming years.
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