China Unicom, Apple iPhone deal is non-exclusive agreement

On the heels of last week's announcement that Apple's iPhone would become available in China late this year, the company has confirmed its agreement with China Unicom is not exclusive to the carrier.

In a significant change from the platform's launch in most other countries, China Unicom may not be the sole carrier of the iPhone in the nation of over one billion, if Apple enters into an agreement with another competing carrier. Speaking with Dow Jones Newswires, an Apple spokesperson confirmed that the China Unicom contract is not exclusive. The person declined, however, to detail whether or not Apple is in negotiations with other possible carriers.

However, last week the chairman of China Unicom said he believes his company will remain the only carrier of the iPhone because it operates on the WCDMA standard, the third-generation successor to the GSM platform. The carrier runs a GSM/UMTS 3G mobile network using the same signaling technology at AT&T in the U.S. and most other carriers worldwide. For Apple to release the iPhone on competing carriers, it would need to alter the device's inner workings.

However, Apple has already modified the iPhone for China, reportedly developing a new hardware model that lacks Wi-Fi and operates on the 900MHz, 1700MHz and 1900MHz bands. That device, given government regulatory approval for use on China Unicom in July, can be sold in the country for five years.

Last Friday, China Unicom and Apple announced a three-year deal to sell the iPhone in China. The nation's second-largest wireless provider plans to launch its 3G network on Sept. 28 in anticipation of the iPhone's debut. China Unicom has an estimated 141 million subscribers, and plans to offer 3G access in 335 cities before 2010.

For comparison, AT&T, as of July, had 79.6 million subscribers. Given the large size of the market and potential for growth, industry watchers have been very interested in Apple's entry into the Chinese cell phone business. Questions remain as to how successful the device could be, as the nation's character-based language is said to not integrate well with user interfaces developed for other countries. But if Apple were to strike a deal with another carrier in addition to China Unicom, the potential for growth and sales would be even greater. The nation's largest carrier, China Mobile, has nearly a half-billion total subscribers.