IPhone 5 hits stores on Friday

Two telecom companies to compete over sales of Apple smartphones

Two Chinese telecom carriers - China Unicom (Hong Kong) Ltd and China Telecom Corp Ltd - announced on Tuesday that they will offer Apple Inc's latest iPhone 5 handsets in the Chinese mainland starting on Friday.

The release date for China comes almost three months after the iPhone 5's debut in the United States. China Unicom will offer service contracts for the device starting at 5,899 yuan ($944) and China Telecom will offer it at a contract-plan price starting at 5,288 yuan.

The iPhone 5's debut in the Chinese market will be the first time that the two telecom carriers will compete with each other over customers starting from the release of an Apple mobile phone product.

China Telecom signed an agreement with Apple and began selling iPhone 4S devices in the domestic market in March, making it the second Chinese operator, after China Unicom, to introduce an iPhone handset on contract in the mainland.

The two telecom operators posted their announcements at almost the same time on Tuesday morning, yet their competition to attract buyers had started several months before.

"The two carriers have recently conducted an intensified marketing war to win over potential iPhone 5 buyers," said Kevin Wang, China Research director of iSuppli Asia Shanghai Ltd.

"It seems that China Telecom, which was a latecomer in becoming an authorized partner of Apple, is moving more aggressively."

China Telecom was the first Chinese carrier to announce it would introduce the iPhone 5 handset to the mainland. It started allowing customers to pre-order the iPhone 5 on Dec 2, a day before China Unicom.

Even so, analysts said China Unicom holds several advantages in the race to sell iPhones.

"Compared with China Telecom, China Unicom has a longer relationship with Apple, as well as a well-developed distribution channel and a long-standing management group," said Huang Meng, telecom analyst with Beijing-based Analysys International.

Huang added that China Unicom is running a third-generation network that uses wideband code division multiple access, or WCDMA, technology, a network telecommunications standard.

"The WCDMA technology is a time-tested, strongly supported and popular 3G technology globally," Huang said.

China Unicom spokesman Wen Baoqiu said that the company expects the iPhone 5 to sell better than the iPhone 4S.

"Market reactions are making us more confident that the iPhone 5 will do better," Wen said.

By Tuesday morning, more than 300,000 pre-orders for the iPhone 5 had been made online, Wen said. China Unicom allowed customers to pre-purchase iPhone 5s early on Tuesday, and the number of those transactions reached 30,000 within an hour, Wen said.

China Telecom did not disclose its figures for pre-orders or pre-purchases.

The third quarter saw 60 million smartphones shipped in China, a record number and three times more than personal computer shipments, according to a report by the research company International Data Corp.

Apple Inc's ranking in the Chinese smartphone market fell to No 6 in the third quarter, when the company commanded less than 10 percent of the Chinese market, the company said.

"I don't think the iPhone 5 will help Apple lift its rankings in the Chinese market, since Apple merely concentrates on high-end buyers," said Sandy Shen, an analyst at technology researcher Gartner Inc.