Second-largest Chinese wireless carrier China Unicom (CHU) is warming up to carve a niche in the Android cell phone market, as the carrier introduces the first batch of its customized Android handsets (under the “Uphone” moniker) in January 2010. However, the official release date has not been confirmed by the Chinese operator.

China Unicom’s Android project is backed by Google’s (GOOG) Open Handset Alliance (“OHA”) program. The company is developing Uphone leveraging its proprietary cell phone operating system (called “UniPlus”) based on Google’s Android software platform. China Unicom will also launch an application store (“UniStore”) that will feature Uphone applications, resembling Apple Inc’s (AAPL) App Store.

The initial Uphone line-up will include Samsung GT-i6500U and Motorola XT701. Samsung GT-i6500U runs on Android 1.5 operating system while Motorola XT701 adopts Android 2.0 operating system. Both these handsets are compatible with WCDMA 3G standard, which has been adopted by China Unicom.

China Unicom joined Google’s OHA program in May 2009 to develop mobile handsets and associated services based on the search engine giant’s open-source Android platform. The company’s larger peer China Mobile (CHL) also joined OHA and collaborated with a number of international handset vendors (including Taiwan-based HTC) to market Android-based handsets (“Ophones”) in China.

China Unicom officially commenced the commercial roll-out of its 3G WCDMA services on October 1, 2009, across 285 Chinese cities. Leveraging its WCDMA network, the carrier launched Apple’s iPhones in mainland China on October 30, 2009 under a three-year agreement.

Uphone, which has been designated as a major national project by the Chinese government, represents China Unicom’s second biggest opportunity in the 3G handset market and effectively complements its iPhone venture. The government backed Uphone project represents the company’s attempt to emulate China Mobile which has launched a line of Ophone handsets based on its proprietary TD-SCDMA 3G technology.

While Ophone represents China Mobile’s answer to iPhones, China Unicom’s other rival China Telecom (CHA) is also pursuing a similar strategy: the company is currently developing Android-based handsets called the “Cphone.” The big three Chinese carriers are banking heavily on the booming market for Android smartphones to boost their respective market share.

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