3G War Heats up

The three models that debuted last Friday were the 8GB, 16GB and 32GB versions of the latest iPhone 3GS, now on sale in the mainland with China Unicom as Apple's local service provider. Priced between 6,000 and 8,000 yuan, the iPhone packages include a handset and two years worth of telecommunications fees.

Unicom's first batch of iPhones lacks WiFi, an important selling point – especially when a smuggled 16GB 3GS iPhone with WiFi costs only 5,500 yuan. However, an iPhone purchaser says that choosing Unicom's iPhone has its advantages.

"I will choose to buy the iPhone with a fee package. The price of the package is similar to the cell phone fee I usually pay. The smuggled ones don't have the advantage in price if the fee package is counted. Plus, the collection value and customer service of the authentic product attract me as well."

APPStore, a piece of software that comes installed on Unicom's iPhone, which enables Unicom customers to download software and contents, may partially make up for the lack of WiFi.

It's estimated that more than 2 million Chinese own smuggled iPhones, and most of them subscribe to China Mobile's 2G network.

But Unicom could lure many of these subscribers away by allowing users of smuggled iPhones to enter its 3G network.

Chen Xiaohui runs an Apple store in Beijing. He says some die-hard Apple fans still favor the smuggled iPhone for their WiFi ability, but in the long run, Unicom's iPhone will make a dent in that market share.

"The smuggled iPhone market will definitely shrink. People who buy smuggled iPhones are those who have very high demands for WiFi and entertainment functions. But the fee package and professional customer support service may bring other interested commercial-oriented buyers to the authenticated iPhone market."

Unicom started selling 3G-equipped iPhones across the country on Saturday, hoping to gain an edge against rival China Mobile, the world's biggest phone company in terms of subscribers.

As of the end of September, China Unicom had 140 million subscribers, much less than China's Mobile's 500 million. However, the 3G service provided by different companies varies.

In January, China's industry regulator issued TD-SCDEMA, WCDMA and CDMA2000, 3G licenses to China Mobile, China Unicom and China Telecom respectively.

"The speed of 3G networks is a pre-condition of a better 3G service. The application of 3G depends on the transmission speed, and the content service."

With the competition intensifying, the war on the 3G market in China rages on.

For China Drive, I am Li Dong.