Apple's China Unicom deal: Will the iPhone win over the Middle Kingdom?

Alex Salkever

The deal we predicted yesterday has come to pass: Apple (AAPL) has announced a deal with China Unicom, China's second-largest cell-phone company, to resell iPhones. But this deal is not nearly as sweet as Apple's deal with AT&T (T): China Unicom will buy iPhones at a wholesale rate, then resell them, with no revenue share for Apple.

But the really key issue here is likely one of network effects. If the China play goes as big as Apple hopes, and China Unicom customers rapidly adopt the iPhone-centric iTunes hub for purchases of applications, perhaps Apple can make itself a dominant player not only in the global smartphone market but also in the battle to control the use of the mobile Internet.

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