Unicom, China Telecom in iPhone 4S 中国电信有望领先推出iPhone 4S Race

By newsdoug on November 25, 2011

China Telecom, Unicom in iPhone 4S race I wrote 3 weeks ago that Apple (Nasdaq: AAPL) had overlooked China in the global roll-out for its newest iPhone, the 4S (previous post), in what looked at the time like a snub to the world’s biggest mobile market where it has had lukewarm relations with its main partner, China Unicom. (HKEx: 762; NYSE: CHU) Now it’s starting to look more like the delays may have been created by the telecoms regulator, which has apparently only recently “validated” the iPhone 4S for use on Unicom’s network, meaning Unicom could offer the hottest new Apple phone by year-end, according to Chinese media reports. Meantime, Chinese media are also reporting that smaller, more nimble rival China Telecom (HKEx: 728; NYSE: CHA), which has been negotiating with Apple for much of this year for its own iPhone deal, has finally signed such a deal, which could allow it to offer the 4S on its own 3G network by the end of this year. (Chinese article) Media have reported several times in the past that China Telecom was on the brink of an iPhone deal, but this is the first time I can recall reports that the company has actually signed a deal, meaning perhaps we could really soon see official iPhone service for China Telecom users. The stakes are relatively high in this race to offer the latest iPhone, as whoever launches the product first will get a first-to-market premium in the form of wide media coverage and extra hype for the product’s official China launch. Based on the current state of play, I would put my bets on China Telecom to win this race, as the company has shown a tendency to be far more market-savvy and aggressive this year than Unicom, which has squandered its chances to pick up market share despite owning China’s best 3G network. China Telecom has seen its share of the 3G market expand steadily this year, to about 28 percent in October from 25 percent in April, while Unicom’s share has stagnated at around 30 percent. If China Telecom does indeed win this race, look for its 3G market share growth to accelerate, which should eventually translate to its bottom line as it reaps profits from this more expensive service.

Bottom line: China Telecom is likely to beat Unicom in the race to be first to offer the iPhone 4S in China, helping it to further boost its share of the 3G market.

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