China Unicom Says It's Talking To Apple About iPhone

Chinese mobile phone operator China Unicom Ltd. (CHU) says it is in talks with Apple Inc. (AAPL) about selling the popular iPhone in the world's most populous country.

Sophia Tso, a China Unicom spokeswoman, confirmed in an email that talks are ongoing, but said the two companies hadn't reached an agreement yet. She offered no other details.

An Apple spokeswoman declined to comment.

The discussions come as Apple, Cupertino, Calif., continues to prioritize launching its iPhone business in China. In the company's last quarterly earnings call, Chief Operating Officer Tim Cook said, "We hope to be there within a year."

Apple has yet to begin selling the iPhone in China, even as the iPhone has become a cornerstone of Apple's revenue growth, accounting for roughly 19% of the company's revenue in its last fiscal quarter.

Apple has actively pursued a partner in China since at least November 2007, when China Mobile Ltd. (CHL) Chief Executive Wang Jianzhou told reporters the companies were discussing a partnership but couldn't come to terms over revenue sharing. China Mobile is the country's largest mobile carrier.

A China Mobile spokesman couldn't be reached for comment.

Now, Apple is negotiating with China Unicom. The company has about 140 million subscribers, less than a third of China Mobile's user base. Still, China Unicom is huge by international standards. It has around 60 million more subscribers than AT&T Inc. (T), Apple's exclusive U.S. partner.

Kaufman Bros. analyst Shaw Wu said China Unicom was "always the front runner." As the smaller carrier, China Unicom is likely willing to pay more for the iPhone than China Mobile, Wu said.

Meanwhile, China Unicom's cellphone network is also a better fit for the chips that Apple uses in its current iPhone, he said.

Apple shares recently were down 1.4% to $165.96. American depository shares of China Unicom fell 2.2% to $14.21.

-By Ben Charny, Dow Jones Newswires; 415-765-8230; [e-mail]