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iPhone off to a sluggish start in China

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Last week, China Unicom officially unveiled Chinese editions of the iPhone 3G and iPhone 3GS. As we reported earlier this month, the Unicom-powered iPhones are the first batch of Apple’s best-selling devices to legally hit the world’s most populous country. (Black and gray market iPhones have existed in China for some time.) So how did the first couple days of sales go?

Badly. According to Reuters, China Unicom has signed up only 5,000 iPhone subscribers since the launch, which is well below most optimistic estimates. In a conversation with Reuters, Piper Jaffray analyst Gene Munster called the figures a “disappointment," and said he had predicated 30,000 units might be sold.

“We believe that eventually China will emerge as a major market for iPhone sales but it could take a year or two to gain meaningful unit traction as it did in the U.S.,” Munster wrote in a research paper.

The 8-gig Unicom iPhone 3G went on sale for 5,880 yuan, or $861; the 32-gig model retails for the equivalent of more than $1,000. The prices may look high to US consumers, but they're in line – if on the upper end of the spectrum – in terms of what Chinese customers might expect to pay. The real issue here may be Wi-Fi access, which the Chinese iPhone doesn't have.

Over at the Register, Rik Myslewski argued that it will take a little time for the iPhone to catch on in China:

Sophisticated Chinese customers may simply be waiting for the next batch of iPhones, which may very well be WiFi-equipped. The Chinese government relaxed its ban in May, but this came too late in the manufacturing process for the first batch of ChiPhones. And before the meager 5,000-sold figure prompts you to prematurely declare Apple's China move a failure, remember that the iPhone's US debut – despite a frothing hype storm unmatched in recent memory – was not itself meteoric.

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