UPDATE: China Unicom, Apple In Talks On iPhone 4, iPad

Telecommunications operator China Unicom (Hong Kong) Ltd. (CHU) and Apple Inc. (AAPL) are in talks about offering the iPhone 4 and the iPad in China, a person familiar with the situation said Thursday.

The news comes as the iPhone has become Apple's largest business and as China Unicom competes with rival operators to boost revenue by encouraging users to buy smartphones and supporting data services.

China Unicom already offers older versions of the iPhone in China, but Apple hasn't yet announced plans to offer either the new iPhone 4 or the iPad in the country, which has the most mobile subscribers in the world.

Apple spokeswoman Jill Tan in Hong Kong declined to comment.

The person familiar with the situation declined to give any details on the talks. It wasn't clear if any deal would involve offering the iPhone 4 with Wi-Fi wireless Internet capability, something that is missing from the current iPhones offered by China Unicom.

China Unicom, one of three Chinese state-owned mobile carriers, earlier this year said it was working with Apple to introduce iPhones with Wi-Fi to China.

Wi-Fi capability had to be disabled in current iPhones from Unicom due to Chinese government regulations, but the missing feature has made the phones less attractive to many Chinese consumers than fully functional iPhones brought in for resale from outside China.

Apple plans to launch the iPad and the iPhone 4 by the end of next month in Hong Kong. Apple started sales of the iPhone 4 in the U.S. and several other countries on Thursday.

Revenue from the iPhone made up 40% of Apple's total business in the company's latest quarter ended March 27.

-By Owen Fletcher, Dow Jones Newswires; 8610 8400 7702; owen.fletcher@dowjones.com

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