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China doesn't love the iPhone? That's the message I'm getting from China Unicom's (NYSE: CHU ) first sales report. Apple's (Nasdaq: AAPL ) partner for the country managed to move just 5,000 iPhones during the handset's debut weekend, The Press Association reports.
Color me unsurprised. China Unicom's iPhone not only competes with cheaper, Wi-Fi capable gray market models that run on China Mobile's (NYSE: CHL ) network, but also comes with two app stores: one from Apple, the other from China Unicom, according to Steven Millward of CNET Asia. Does anyone else see this as a problem?
Don't get me wrong. Dell's (Nasdaq: DELL ) forthcoming smartphone for China Mobile's network may as well be a host for the carrier's relatively new applications store. SK Telecom (NYSE: SKM ) , which has said it's evaluating the iPhone's success on the Korean peninsula, also has an applications store. Everyone wants a piece of Apple's pie, and for good reason.
With more than 100,000 apps, many of which earn a 30% revenue slice for the Mac maker, the iTunes App Store looks to be the high-margin winner that the iTunes Music Store never could be. The difference is that, unlike AT&T (NYSE: T ) here in the U.S., China Unicom is partnering with and competing with Apple. Expect users to be confused.
If, that is, they buy China Unicom's iPhone. So far, they aren't. Earlier iPhone rollouts have typically resulted in 20,000 handsets sold per day, the Press Association estimates; 5,000 in a weekend looks weak by comparison.
I'm not convinced China Unicom can buck this trend. Not unless either (a) China cracks down on gray market iPhones, or (b) the carrier does more to earn the 20% or so price premium it's demanding of buyers.
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