Apple Faces iPhone Hurdles In China

Apple (NSDQ:AAPL)'s iPhone is off to a slow start in China, much to the chagrin of the country's No. 2 mobile carrier, China Unicom, which is hoping to get an iPhone boost much like other carriers round the world.

Many Beijing stores still had iPhones in stock Sunday night, according to The Wall Street Journal, and crowds were more subdued when compared to the mania that led to sold-out locations when the Apple device was introduced in the U.S. and Japan.

Apple signed a three-year deal with China Unicom on Aug. 28 to sell the iPhone in China, hoping to tap into China's 710 million mobile phone users. At that time, the carrier said it planned to grow through more services and place more emphasis on 3G business. Last week, the company said its profit fell in the third quarter as it looks to build the expensive 3G networks using the WCDMA standard to support the iPhone.

Apple and China Unicom also face the challenge of cost for the iPhone, reportedly $750 to $1,000 through the companies, while more than 2 million iPhones have been brought into China for much less from other countries, according to the Journal.

Also hampering Apple's efforts in China is the fact that its initial offering won't include Wi-Fi features, according to the Shanghai Daily.

In addition, China Unicom last week released a survey of its WCDMA signal quality, which showed that only 30 cities now meet the company's ideal standards. Nearly as many have average (17 cities) or poor (11 cities) quality, according to Tencent Tech, a media company for China's 3G market.