UPDATED: China Unicom: The People's iPhone 3G?

 It appears Apple is closing in on a deal to offer the iPhone in China, following months of discussion with carrier networks there – but optimism of this has since been denied by the company concerned.

Apple has been engaged in talks with China’s largest mobile carrier, the eponymously-named China Mobile. However, local reports now claim talks with that carrier have broken down, driving Apple to the arms of smaller incumbent, China Unicom.

Since these reports emerged this morning, however, China Unicom has gone on the offensive to deny them. "This rumored cooperation is nonsense," an unnamed Unicom executive told Trading Markets. "The company will not approach Apple at this moment when the nation’s telecoms regrouping has not come to an end, let alone discuss about the iPhone deal. Because it is not clear which 3G wireless license China Unicom will get after the reshuffle."

Talks with China Mobile allegedly broke down because the companies were unable to agree a mutually acceptable revenue-sharing deal. 

Reports currently suggest the iPhone 3G will ship in China this August, though there is a catch – Chinese users will be unlikely to be able to use 3G on their devices because the 3G network in the country hasn’t been implemented yet. The Chinese government is expected to allow operators to begin introducing 3G networks later this year, with China Unicom expected to receive a 3G license to operate services on the network.

China Unicom has declined comment on these reports.

Interestingly, China Mobile in February apparently reported it was aware of 400,000 iPhones already in use on its network, these models were purchased in Europe and the US, unlocked and returned to China.