Could lack of Wi-Fi slow iPhone sales in China?

Short answer: probably. Analysts have already begun criticizing the Chinese edition of the iPhone, which comes without Wi-Fi access.

A woman holds up an iPhone 3GS handset at the China UniCom business hall on Thursday. Chinese telecom operator China Unicom has announced that it will formally start to sell Apple's iPhone 3G and iPhone 3GS handsets in mainland China starting today.

On Friday, China Unicom rolled out Chinese editions of the iPhone 3G and iPhone 3GS – the first of Apple's best-selling devices to hit the world's most populous country. The 8-gig Unicom iPhone 3G will be sold for 5,880 yuan, or $861; the 32-gig model will go for the equivalent of more than $1,000.

Why are the prices so high? Well, those figures apply to handsets sold without any sort of contract, which is the way many Chinese citizens purchase their phones. As for the voice service, the Wall Street Journal reports that "China Unicom is offering 8 levels of third-generation wireless service packages, ranging from 126 yuan ($18) a month to 886 yuan ($130) a month."

Again, expensive, but not exactly sky-high compared to current trends in China.

In fact, the real problem with the Unicom iPhone has nothing to do with price. Or service plans. Instead, the real problem is with the phone's functionality. As the Associated Press noted this week, the Unicom handsets are missing one very important feature:

Unicom's iPhones lack WiFi because it was temporarily banned by Beijing, which was promoting a rival Chinese system, according to BDA. The ban was relaxed in May after manufacturing had begun. A Unicom spokesman, Yi Difei, said the company hopes to have WiFi in the next batch of phones. "We are talking with Apple and expect the problem to be solved by the end of this year," Yi said.

In the meantime, many analysts worry that the lack of Wi-Fi could slow sales of the first Unicom iPhones.

"There's going to be a perception that the phone they have is dumbed down from the one that somebody has in California," Duncan Clark, chairman of BDA China Ltd., a Beijing-based technology research firm, told the AP. "We've seen before that Chinese consumers don't like to be treated like second-class citizens."

Here in the US, Apple has enjoyed solid sales of both the 3G and the 3GS. As we reported earlier this month, Apple recently rolled out an update to the iPhone operating system, which it says will improve performance on the best-selling phone. The 3.1.2 update, which can be accessed by launching iTunes and checking for system updates, is being billed as a bug-killer.


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