China Unicom Ltd. (CHU) said Friday it signed a three-year agreement with Apple Inc. (AAPL) to sell the iPhone in China, with an official initial launch likely in the fourth quarter.

China Unicom Chairman and Chief Executive Chang Xiaobing said at a news briefing the company will offer two versions of the third-generation iPhone.

The company, China's second-largest mobile carrier by users, hopes the iPhone will give it a long-sought competitive edge over its larger rival, China Mobile Ltd. (CHL), allowing it to attract an elite customer base in Chinese cities, where cellphones are often status symbols.

China Unicom had 141 million users at the end of July, compared with 498 million for China Mobile, the most of any carrier in the world.

China Unicom didn't elaborate on its iPhone plans in a statement, but investors are eagerly anticipating details on pricing, the service package, and the extent of handset subsidies. It is also unclear whether the device's Wi-Fi Internet function will have to be disabled to comply with Chinese regulations.

Apple spokesman Alan Hely confirmed the deal with China Unicom, but declined to give further details.

-By Lorraine Luk and Aaron Back, Dow Jones Newswires; (8610) 6588-5848; aaron.back@dowjones.com