Apple's iPhone hits China with high price, without Wi-Fi

That high price was cited by The Wall Street Journal as the "buzz-killer" over the handset's debut. The high-end iPhone 3GS sells for 6,999 yuan ($1,024) without a service contract, which is how most people in China purchase their phones. The same handset can be bought for about $800 in Hong Kong.

"When wrapped together with a service plan, as is generally done in the U.S., the phone will cost Chinese subscribers at least $3,120 over two years, compared with the roughly $2,600 cost for the same period for customers in the U.S.," the report said.

The average cost of a smartphone in China is $350. And Apple must also compete with an estimated 2 million imported iPhones that were already in China as of the summer of 2009.

The cheapest iPhone runs 4,999 yuan, or $630, according to The Associated Press. And all of the officially sanctioned models come without Wi-Fi. But an imported iPhone 3GS with Wi-Fi can be bought from Chinese street markets for 5,700 yuan, or $835.

China Unicom said it hopes to have Wi-Fi in the next batch of iPhones it intends to release by the end of the year. The feature was left out of the hardware because the government's regulations temporarily banned the system in favor of a rival Chinese offering. That ban, however, was relaxed in May, after manufacturing of the new iPhone model began.

The iPhone's debut in China has been delayed not only by Chinese government regulations, but also talks with the nation's carriers. The country of over 1 billion is the largest cell phone market in the world, and one that Apple has been eager to take a crack at, despite a number of setbacks.

The agreement between Apple and China Unicom was made official in August. The non-exclusive agreement has left the door open for Apple to turn to competitor China Mobile, the world's largest wireless operator. Apple has been in negotiations with China Mobile for some time. China Mobile has 508 million wireless subscribers, while China Unicom has 143 million mobile accounts.