How strongly the iPhone sells in China will depend on the subsidy China Unicom provides for it, analysts say. Chinese consumers spend an average of 1,100 yuan, or about $160, on cellphones, according to BDA. For comparison, the newest iPhone 3GS model starts at $199 in the U.S. with a two-year service contract, and $599 without any service commitment.
In China, Apple and its operator partner face another challenge: most users prefer to prepay for services rather than subscribe to a monthly service. Average monthly revenue per user in China is also less than $6, in part because overall charges are lower, compared with about $60 for ATT Inc., the exclusive iPhone provider in the U.S.
Still, the payoff could be huge for Apple. Xiang Ligang, chief executive of Chinese telecommunications news portal Cctime.com, estimates 100 million mobile phone users in China change their phones every year and about 20 million of those buy high-end mobile phones. In some of the biggest cities especially, mobile phones are often seen as status symbols and high-end cellphones typically cost upwards of 3,000 yuan.
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