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It's official: Apple, China Unicom strike 3-year deal


Following weeks of speculation and false reports, Apple and China Unicom have finally hurdled the Great Wall for a three-year deal to sell the iPhone.

Multiple reports have confirmed the agreement on behalf of both China Unicom and Apple. According to The Wall Street Journal, the carrier will offer two versions of the iPhone in the fourth quarter of 2009. As expected, the device will have its Wi-Fi capabilities disabled, as required by government regulations.

China Unicom also plans to launch its 3G network on Sept. 28 in anticipation of the iPhone's debut. The nation's second-largest carrier has an estimated 141 million subscribers, and the state-owned provider will offer 3G access to start in 285 cities, expanding to 335 locations before 2010.

Officials declined to reveal the price of the device, but The Associated Press reported the iPhone was set to sell for a "competitive" price. Previous reports that China Unicom had agreed to pre-purchase 5 million phones were again denied. The report cites analysts at Bank of America Merrill Lynch as saying the phone will likely sell with two-year service contracts for between $99 and $299, as they do in the U.S.

"Apple's talks with potential Chinese carriers had snagged on disagreements about how to share revenues, according to Chinese news reports," the report states. "But (a China Unicom official) said the companies will not share revenues, with Unicom instead buying the phones in batches from (Apple) and offering them with subsidies."

There are still questions whether the Chinese will even be interested in the iPhone. The Journal cites estimates that 1.5 million "underground," hacked and unlocked iPhones are already in use in China. And it also notes that the nation's character-based language doesn't always integrate with user interfaces developed for other countries.

"This definitely opens up a a window for Apple to get into this tremendous market," said Edward Yu, chief executive at Analysys International, a Beijing-based technology research firm, told The Associated Press. "But we still need to see the real product to determine whether this will play with the mainstream China population and how the market reacts."

The new model of the iPhone was given government regulatory approval for use on the China Unicom network in July. That device is a GSM/WCDMA iPhone that operates on the 900MHz, 1700MHz and 1900MHz bands.