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Friday, November 20, 2009, 08:00 am PT (11:00 am ET)

China Unicom expects 10% of 3G users on iPhone in 3 years

Despite a slow sales start, Apple's wireless carrier in China has high expectations for the iPhone, with the company anticipating the handset will carry 10 percent of China's 3G users within three years.

An unnamed senior executive with China Unicom told China Daily that the nation's second-largest carrier has seen great interest in the iPhone from businesses in the nation of over one billion. The company believes that interest will drive the iPhone to a 10 percent share of 3G devices in two to three years.

In addition, China Unicom Chairman Chang Xiaobing publicly said this week that he expects the iPhone to be the best-selling smartphone in all of China.

Officials still have high expectations for Apple's phone, despite the fact taht only 5,000 total subscribers were gained when the iPhone launched in late October. Still, China Unicom is said to be pleased with the success of the device thus far, which coincided with the debut of its 3G network. By the end of October, the carrier was reported to have 1.02 million total 3G subscribers, and officials expect to add another million each month.

Apple hopes to expand its presence in China beyond China Unicom, and is currently in talks with China Mobile, the world's largest wireless carrier. Earlier this year, it was estimated that China Mobile has 475 million subscribers, while China Unicom has 141 million of the nation's 700 million total cell phone users.

One issue for the iPhone in China has been its relatively high price of 6,999 yuan ($1,024) for the high-end iPhone 3GS without a service contract. But the same phone can be bought on China's gray market in Hong Kong for about $800.

Another problem is the Chinese iPhone's lack of Wi-Fi. The feature was left out because the government's regulations temporarily banned Wi-Fi in favor of a rival native system. The ban was not relaxed until May, which was after manufacturing of the new iPhone began. China Unicom officials have said they hope to have a new iPhone equipped with Wi-Fi available by the end of the year.