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Tuesday, November 17, 2009, 05:55 am PT (08:55 am ET)

Apple's iPhone App Store takes off in China

Despite a slow start in official handset sales, the iPhone has found success in China with customers flocking to the App Store, even with the device's lack of Wi-Fi.

Popular applications in China include a Chinese-to-English translator and dating software to find "soul mates," according to The Wall Street Journal. The early success of the App Store comes in spite of the cards being stacked against it: China Unicom was estimated to sell just 5,000 iPhones at launch, the hardware only offers 3G Internet connectivity, and App Store purchases require a credit card issued by a Chinese bank, which is not commonplace.

Among the apps that have found success in China are Sina.com, a Web portal that gives access to news updates and blogs; QQ, a popular instant messaging system; and Western software like the Command & Conquer game from Electronic Arts. For now, most applications are priced and detailed in English, but it hasn't prevented an estimated $1 million in legitimate iPhone application sales this year.

One of the biggest issues for the iPhone in China is the large black market from which unofficial handsets have been purchased. While official phones got off to a slow start, it is estimated that there are two million total iPhones in circulation in the nation, most of them "jailbroken." Those hacked phones can be used to run unauthorized code and pirate App Store software.

According to the Journal, most pirate Web sites have "detailed instructions" in Chinese, spelling out how to steal software and install on the iPhone. This is in contrast to the non-native language commonly found on the official App Store.

Even if its slow start for iPhone sales continues, Apple would still sell an estimated 550,000 handsets in its first year. Some expect the sales to pick up, though, once a new model with Wi-Fi is introduced. The feature was left out of the launch phone because the Chinese government temporarily banned the wireless standard. That ban was relaxed in May, after manufacturing of the new iPhone began, and carrier China Unicom hopes to have Wi-Fi in the next batch of phones intended for release by the end of the year.

More sales, and App Store activity, could come from a potential deal with China Mobile, the world's largest wireless carrier. Apple entered an agreement with China Unicom in August, but the non-exclusive deal left the door open for other carriers.