The Apple iPhone is set to make its debut in China later this year after the U.S. company entered into an agreement with China Unicom, the second largest country mobile operator.

China Unicom said on Friday it would start selling the iPhone 3G in the fourth quarter after the signing of an exclusive three-year contract with Apple.The company said it would not use Apple's traditional revenue sharing model, and prefer pay the wholesale group basis.China Unicom said it expects the introduction of the iPhone will increase profitability to decline.

The company said on Friday that net profit fell 42.1 percent first half to Rmb6.62bn ($ 969m) amid intense competition, while revenue fell 4.3 percent to Rmb74.51bn.Chang Xiaobing , president and CEO, said he expected the iPhone to attract more advanced users who spend more on data services.

According to Chang, "The iPhone will help us change the structure of our customer base and improve the [average revenue per user]." China Telecom, meanwhile, is in talks with Research In Motion, the manufacturer of the BlackBerry and Palm devices offer.