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China's largest e-commerce site sells 5 iPhones in 2 weeks

By Katie Marsal
Thursday, December 03, 2009, 07:50 am PT (10:50 am ET)

Just five official China Unicom iPhones have been reported sold through Taobao.com, the eBay of China, in its first two weeks of availability on the Web site.

According to IDG News Service, the site has sold just two of the 8GB iPhone 3G, and three of the 16 GB iPhone 3GS. It does not mention any sales of the 32GB iPhone 3GS.

China Unicom opened its official iPhone store on Taobao.com on Nov. 22. It is the only Web site, aside form the official China Unicom one, where customers can buy official handsets. All purchases are said to be activated before they are shipped.

When the iPhone launched on China Unicom in early November, it sold just 5,000 handsets in its first few days. However, the wireless carrier has said it is satisfied with the device's performance thus far.

The biggest issue for official iPhones in China is said to be the nation's gray market. While the high-end iPhone 3GS carries a relatively high price of 6,999 yuan, or $1,024, without a contract, the same handset can be purchased on the gray market in Hong Kong for about $800.

The level of enthusiasm in the nation of over one billion has also been restrained by the lack of Wi-Fi in the official China Unicom iPhone. The feature was left out because the Chinese government temporarily banned the wireless standard in favor of a rival Chinese offering. The ban was relaxed in May, after manufacturing of the phone began, and China Unicom officials expect to have a new Wi-Fi-equipped phone available soon.

Difficulty using the App Store may also play a part, IDG News Service added.

"Credit cards are increasingly common in China, but their holders rarely use them to make small payments via mobile phone, local consultancy Analysys International said in a research note," the report said. "Credit card penetration also remains low among young people of the sort that would like the App Store, it said. Many Chinese make payments via mobile phone but do so with prepaid cards sold by local carriers. The App Store will need to add new payment options and more localized content to win more users in China."

In contrast, since the iPhone launched in South Korea last week, it has reportedly sold more than 60,000 through online orders.

Despite its slow start, China Unicom officials have said they expect 10 percent of 3G users on its network to be using the iPhone within three years. The company's chairman has also predicted that Apple's handset will become the best-selling smartphone in all of China.
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