UPDATE: China Unicom Parent: iPhone 4 Demand Still Exceeds Supply

Demand for Apple Inc.'s (AAPL) iPhone 4 handsets in China still exceeds supply, leading China Unicom (Hong Kong) Ltd. (CHU) to take steps to prevent users from buying and reselling the phone at a high price, China Unicom's parent company said in a statement on its website Monday.

China Unicom has taken more than 600,000 iPhone 4 orders, China United Network Communications Group Co. said. It didn't say how many of those units have been delivered.

The statement is the latest sign the popularity of Apple's smartphone has strained availability. China Unicom previously said its iPhone 4 supply couldn't meet demand in late September, when it launched sales of the phone and had 200,000 pre-orders to fill.

China Unicom's parent said China Unicom will soon launch a policy to potentially freeze iPhone buyers' deposited funds if it discovers their phone numbers aren't being used with their iPhone handsets. The measure aims to prevent resale of the handsets, which has "severely disrupted" market order, the statement said.

Apple didn't immediately reply to a request for comment.

Network operators elsewhere have also faced tight supply of the iPhone 4. Telstra Corp.'s Hong Kong unit, CSL Ltd., said in August it was facing challenges delivering the iPhone 4 due to overwhelmingly high demand.

In the U.S., high demand for the iPhone 4 in late June led operator AT&T Inc. to stop taking new orders on the first day of pre-orders, citing processing problems. In a statement at the time, Apple Chief Executive Steve Jobs said the company apologized to customers who were turned away due to insufficient supply.

Apple was China's fifth-largest smartphone vendor in the third quarter with a 5.9% share of unit sales, but the iPhone 4 is likely to boost its fourth-quarter sales, said Beijing research firm Analysys International. Nokia Corp. had the largest share of China's smartphone market in the third quarter at 23.5%, according to Analysys.

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

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