The product eliminates the WiFi function but keeps the support of 3G network, Bluetooth and other popular features, said an anonymous source in Foxconn.

It also said the negotiations between Apple and China Unicom is nearly over and the two firms will announce the details in the next few weeks.

According to experts, China’s ban on the WiFi function in cellphones, the amount of handset subsidy, and Apple’s insistence on running its App Store in China are the major obstacles that are keeping iPhone out of China.

China Unicom hopes that by introducing iPhone, the company could increase its appeal to high-end cellphone users in China and also challenge China Mobile’s top perch.

But experts think iPhones may not pose a threat for China Mobile, as the barring of the WiFi function will keep off many prospective users. They said most of the high-end users in China are still those that mostly use voice services and do not have great interest in 3G services.

The Chinese telecom regulations banned the use of WiFi functions in mobile phones due to fears over IP-telephony and the support for WAPI, a domestic rival for WiFi.

Source : Konaxis