China Unicom to pass on the next iPhone, says too much subsidies and network upgrades are hurting

China Unicom to pass on the next iPhone, says too much subsidies and network upgrades are hurting
China Unicom was the first Chinese carrier to joyfully offer the iPhone 4 when it was introduced, signing a test 2-year contract with Apple in 2010 that expires next month. 

Unfortunately this hasn't turned out the bonanza it thought it would be, as huge subsidies for the device, and heavy investments in network infrastructure to cope with the surge in wireless data demand have damaged its bottomline.

That's why China Unicom is reported to pass on renewing the contract with Apple for postpaid sales of the iPhone 4S or the next iPhone, as it realized most of the profit has gone to Apple instead of to the carrier by the end of the contract. It is the second largest Chinese carrier, though, so if Apple signs up a juggernaut like China Mobile for the sixth generation iPhone, the China Unicom decision shouldn't make that much of an impact on its sales in that all important neck of the woods.

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16 Comments

1. Phullofphil

Posts: 1740; Member since: Feb 10, 2009

Good, Its not like i dont like apple cause i do but it seems whereever the Ipone goes so does cutts in customer promotion insentive and other goodies such as earl upgrade for verizon after a year.

2. Cyan3boN

Posts: 446; Member since: Feb 23, 2012

u better act quick apple. thats the biggest subscriber market you are dealing with.

3. Aeires unregistered

Dan Hess, you reading this?

4. QWIKSTRIKE

Posts: 1457; Member since: Mar 09, 2010

Agreed should have spent that money on rolling out LTE, and getting Phones like Nexus, and Galaxy S III

9. rla2680

Posts: 18; Member since: Aug 17, 2012

Sprint had no choice but to get the iphone. The timing is certainly questionable as they are very very late to the bandwagon and not benifiting from the device nearly as they would have they carried it earlier, but certainly was a necessary evil

10. Aeires unregistered

I don't buy the line that says a carrier has to have the iPhone to compete. Sprint has great pricing and their greatest asset is unlimited data. As Qwikstrike above commented, they should have focused on more important issues, like building a rock solid LTE network, especially when you look at how overshadowed their Wimax was compared to HSPA+ and Verizon's network. The iPhone on Sprint could have waited a couple more years.

11. rla2680

Posts: 18; Member since: Aug 17, 2012

do you think that would have been enough to hold off the millions of customers who were fleeing just to get the iphone among other things?

14. remixfa

Posts: 14605; Member since: Dec 19, 2008

when you look at how much Sprint has given to Apple to carry the iphone and how they basically and literally gave away ALL of their profit for the next few years to carry the phone, I think it was an idiotic "me too" move. The money they spent would have been MUCH better spent on a faster, wider LTE roll out. They could have built out the LTE network with money left over for advertising for the money they spent on the iphone. Their network is slow as crap. Who cares about unlimited when its unlimited dial up speeds. Wimax is over saturated and junk for most sprint customers. The iphone was a bad move. LTE would have been the better move. "Look we have LTE and unlimited everything for $110 a month with a smart phone!" is a much better line than "look, we now have the iphone like everyone else.. just slower!" Their new $400 for new customer offer shows that they are still in desperation mode. The iphone obviously is not doing its "magic" trick they hoped it would do.

5. MeoCao unregistered

The Chinese use iPhone as status symbol and don't use lots of data so if the carriers subsidize heavily the phone they will not get their money back what they can with the US users.

6. smartphone

Posts: 160; Member since: Oct 21, 2011

" the next iPhone " hmmm.... This may be the real name of the sixth gen iPhone.

7. jmoita2

Posts: 930; Member since: Dec 23, 2011

I predict the next iPhone to be one of the biggest flops in the history of cellular. The simple reality is that they've been surpassed a long time ago, and every "new" version is more of the same with tiny,barely noticeable improvements. The iPhone will soon be where Blackberry finds itself. Due to their arrogance they sat on their laurels too long,believing their position as the "elite" was unassailable. Now all they do is play catch up, but not fast enough while at the same time trying to hold on to gigantic profit margins. A recipe for disaster...

16. MeoCao unregistered

So often people are blinded by their own greed.

8. Sniggly

Posts: 7305; Member since: Dec 05, 2009

It's amazing how often my predictions have been vindicated by the news.

15. MeoCao unregistered

Haha, b-c u r smart.

12. rallyguy

Posts: 620; Member since: Mar 13, 2012

I hope this is a trend. Each carrier takes on a huge burden for a phone that is good, but not great. The Iphone is a 5 year old truck with a new paint job and engine rebuild.

13. poojaroy

Posts: 52; Member since: Apr 29, 2012

apple only want to fill their pockets that is the reality...once the carriers stop entertaining them ,apple will be lost in dust ....mark my words

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