iPHONE ARRIVES IN CHINA WITHOUT KEY FEATURE

       Apple's iPhone is making its long-awaited formal debut in the world's most populous mobile-phone market, without a key feature and at higher prices than widely available black-market models.
       Apple's local service provider, China Unicom, hopes the iPhone will give it an edge against giant rival China Mobile, the world's biggest phone company by number of subscribers.
       Unicom was to start selling iPhones equipped for third-generation (3G) services last week at 2,000 stores in areas as far-flung as Tibet. Chinese news reports said Unicom hoped to sell 5 million iPhones in three years, but the company declined to confirm that.
       Unicom's first iPhones lack WiFi, a possible handicap with sophisticated, demanding Chinese buyers. The technology, a key part of the iPhone's appeal, allows owners in other markets to use wireless networks in cafes and offices to download e-mail and the latest applications, free of charge.
       "There's going to be a perception that the phone they have is 'dumbed down' from the one that somebody has in California," said Duncan Clark, the chairman of Beijing-based technology-research firm BDA China.
       "We've seen before that Chinese consumers don't like to be treated like second-class citizens."
       Apple and Unicom could also face competition from an unusual source: unlocked iPhones brought in from abroad that have WiFi.
       There are already an estimated 1.5 million to 2 million such phones in China using China Moile's 3G service that allows Internet access and other features.
       Unicom's prices range from 4,999-6,999 yuan (Bt24,500 to Bt34,300) for the high-end, 32-gigabyte iPhone 3GS. That is 20-per-cent more than the 5,700 yuan charged by merchants at Chinese street markets for a 3GS with WiFi.
       The iPhone's awkward, delayed entry into China reflects the regulatory and technical hudles of a fast-changing market where other global technology companies have struggled to establish themselves.
       Unicom's iPhones lack WiFi because it was temporarily banned by Beijing, which was promoting a rival Chinese system, BDA said. The ban was relaxed in May after manufacturing had begun.
       A Unicom spokesman, YiDifei, said the company hoped to have WiFi in the next batch of phones.
       "We are talking with apple and expect the problem to be solved by the end of this year," Yi said.
       The iPhone debuted in the United States in June 2007, but its formal arrival in China was delayed as Apple negotiated with service providers. Chinese media said the talks were snagged on disagreements about how revenue should be divided.
       China has more than 650 million mobile-phone accounts despite an average annual income of only US$3,000 (Bt100,000) per person. Consumers trade in phones as often as several times a year to obtain the latest models and features.
       China Unicom has 143 million modile accounts, which would be an impressive figure in any other market but lags far behind China's Mobile's 508 million accoutns.
       Global technology companies that dominate other markets have struggled to obtain a foothold in China. Search engine Google has less than 30 per cent of the market, against more than 60 per cent for local rival Baidu. Yahoo turned over its Chinese operation to a local partner after failing to expand its market share.
       China's state-owned phone companies were restructured by the government into three groups last year in hopes of reviving competition after the explosive popularity of mobile services turned China Mobile into a behemoth.