Apple's iPhone makes lacklustre start in China

Apple Inc.'s Chinese partner has sold 5,000 iPhones since the smart phone's formal weekend debut in China, a lackluster start after analysts warned the company might be setting prices too high. China Unicom Ltd. chairman Lu Yimin told shareholders Tuesday in Hong Kong that iPhone sales had "passed 5,000" as of that day, said Zhang Xinnian, director of investor relations for the company's Hong Kong arm.

Unicom's first iPhones lack Wi-Fi due to Chinese regulatory restrictions and are priced at about 20 percent above unlocked models brought in from abroad and sold in Chinese street markets. Some customers said they paid the higher price to get Unicom support and to avoid the risk of getting counterfeit models.

In the United States, Apple says it sold 4 million iPhones in the first 200 days of sale in 2007, or an average of 20,000 per day.

Unicom hopes the sleek smart phone will give it an edge against giant rival China Mobile Ltd., the world's biggest phone company by subscribers. Chinese news reports say Unicom hopes to sell 5 million in three years, but the company declined to confirm that.

Unicom's prices range from 4,999 yuan ($730) to 6,999 yuan ($1,025) for the high-end, 32-gigabyte iPhone 3GS. That is 20 percent above the 5,700 yuan ($835) charged by merchants at Chinese street markets for a 3GS with Wi-Fi.

China has an estimated 1.5 million to 2 million such phones using China Mobile 3G service that allows Internet access and other features.

Associated Press