Two weeks, 5 iPhones sold in Chinese online store

IDG News Service - China Unicom has sold just five iPhones through a big online retail site in the two weeks since it opened the virtual store, the latest sign that the handset is suffering in China from its high price and lack of Wi-Fi.

An official iPhone store on Taobao.com, the biggest Chinese e-commerce Web site similar to eBay, has sold just two 8GB iPhones and three 16GB iPhones, according to figures on the site. The store launched in the middle of last month, a few weeks after China Unicom began offering the first official iPhones in China.

China Unicom is also selling iPhones through its own Web site, which does not list sale figures. But Taobao is China's top online retail site and many users turn to it to buy items like mobile phones and laptops.

The China Unicom iPhones have to compete with iPhones brought into the country from abroad, which users have bought since long before the official handset arrived. iPhones bought outside China have Wi-Fi, which was removed from the China Unicom iPhones to comply with local regulations. The official handset is also more expensive than iPhones bought elsewhere. The 32GB iPhone 3GS with no service contract costs 6,999 yuan (US$1,024) in China, compared to about US$800 in nearby Hong Kong.

Slow sales at the online shop follow earlier signs that the official iPhone is unpopular in China. China Unicom has reportedly said it sold just 5,000 iPhones in the few days after its launch. That contrasts with the more than 60,000 online orders South Korean carrier KT received before launching the iPhone in its country last week.

Difficulty using the App Store may be another strike against the iPhone for Chinese users. 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. 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, the consultancy said.

China Unicom has kept outwardly positive about the iPhone's prospects. A company executive last month said China Unicom expects 10 percent of China's 3G users to buy iPhones, according to Chinese state media.