Friday night Apple together with China Unicom held a launch event for iPhone. There was no buzz and long buyer lines that have accompanied launches of the handset elsewhere.
Smog hung in the Beijing air as buyers filled about two-thirds of an outdoor sales queue set up at a shopping mall. Beijing's first rain in weeks fell on an overhead canopy during the event.
"It's because of the rain, the temperature really is a little low today," said Li Yi, a 27-year-old man waiting in line to buy an iPhone 3GS, when asked about the low attendance.
High prices may also have kept away buyers. Chinese shoppers can find cracked gray-market iPhones for around 4,000 yuan (US$587) at many local electronics markets, while the cheapest iPhone being sold by China Unicom costs 4,999 yuan with no service contract, PC World reports.
It was also reported, the device, however, does not come with the WiFi chipset that would enable users to connect to high-speed local networks, something that analysts say could hurt sales, the Associated Press reports.
Price could also hurt sales of the phone. China Unicom's iPhone lineup ranges from 4,999 CNY (US$732) to 6,999 CNY (US$1,024) while black market street costs for iPhones range lower. An iPhone 3GS with WiFi capability costs 5,700 CNY (US$834), 20 percent lower than China Unicom's top-of-the-line iPhone that excludes the wireless LAN technology. The carrier has said that it hopes to include the WiFi chipset in future models, Mobile Burn reports.
Meanwhile, China Unicom (0762.HK), the country's No.2 mobile carrier, said profit declined from the previous quarter, a weakening trend that could continue as competition intensifies and expensive 3G networks are built.
Last week, rivals China Mobile (0941.HK), the world's No.1 mobile carrier, and China Telecom (0728.HK) also reported disappointing earnings.
Unicom is building its 3G network with the world's most mature standard, WCDMA, but is struggling to integrate new businesses after last year's industry shakeup that saw it combined with another company to take on its current form.
Signing a three-year non-exclusive deal to sell Apple's (AAPL.O) popular iPhone will help the company's 3G launch, but the iconic handset is expensively priced and may eventually require more subsidies to achieve wider acceptance, Reuters reports.