Monday, November 02, 2009, 11:00 am

Apple's iPhone sees tepid sales debut in China

By Katie Marsal

Hundreds of people showed up for the iPhone launch party in Beijing last week, but the handset failed to sell out in many Chinese stores.

Compared to iPhone debuts in the U.S. and Japan, the Chinese launch was "subdued," The Wall Street Journal reported. While the reaction was not necessarily indicative of sales, it is likely due to the fact that gray market phones have been available for import in China for years, and at competitive prices.

Still, many attended to official China Unicom launch party Friday night. Around the nation, though, reports of sales did not indicate significant demand. Apple and China Unicom did not announce any launch sales figures for the 2,000 locations where the iPhone was available.

"At the Apple store in Beijing, the company's only location in China, the crowd seemed less enthusiastic," the report said. "Employees cheered anyone who came in with chants of 'iPhone! iPhone!' But there were no lines for the stacks of new iPhones."

On Friday, the iPhone debuted with a relatively high price of 6,999 yuan, or $1,024, for the high-end iPhone 3GS without a service contract. The same handset can be purchased in Hong Kong for about $800.

Some potential buyers have been turned off by the lack of Wi-Fi in the handset. The feature was left out because the Chinese government temporarily banned the wireless standard in favor of a rival Chinese offering. But that ban was relaxed in May, after manufacturing of the new iPhone model began. China Unicom has said it hopes to have Wi-Fi in the next batch of iPhones intended for release by the end of the year.

Apple and China Unicom announced their three-year deal for the iPhone in August. The non-exclusive agreement has left the door open for a potential deal with China Mobile, the world's largest wireless carrier.