China Unicom (Hong Kong) Ltd. (CHU) plans to start selling an 8-gigabyte version of Apple Inc.'s (AAPL) iPhone 3GS with Wi-Fi capability in China next week, a China Unicom official familiar with the situation said Thursday.

The iPhones that Unicom has offered in China so far have come with Wi-Fi removed to comply with previous government regulations, but the missing function has made the phones less attractive to buyers.

Offering an iPhone with Wi-Fi wireless Internet capability could help boost Unicom's sales of the device, which got off to a slow start late last year in a market already crowded with "gray-market" iPhones brought into China from other regions.

Unicom and rival mobile carriers China Mobile Ltd. and China Telecom Corp. are competing to recruit users for their more expensive 3G services, largely by offering attractive handsets that can use such services.

Unicom currently offers an 8-gigabyte version of the iPhone 3G, and 16-gigabyte and 32-gigabyte versions of the iPhone 3GS, all without Wi-Fi capability.

Apple spokeswoman Carolyn Wu said the company hasn't said if it will make the 8GB iPhone 3GS available in China.

Unicom has also said it is in talks with Apple to offer the iPhone 4 and the iPad, though Apple hasn't announced plans to offer those products in China.

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