China's IPhone Carrier to Launch Own Linux-based Smartphone

China  Unicom  plans on releasing its own Linux-based smartphone at the end of the year in China, as the company confronts sluggish revenue growth and increasing competition.

The device is tentatively being called the "uphone", said Zhang Zhijiang the head of China Unicom's tech and research institute. No price has been determined, but the smartphone is being developed with Chinese network suppliers Huawei and ZTE, along with Chinese cellphone maker OKWAP, Zhang said.

Zhang revealed the device was in development while speaking about the company's efforts at innovation during the GSMA Mobile Asia Congress in Hong Kong on Thursday.

China Unicom is the country's second-largest mobile operator with 162 million subscribers. It is also China's sole carrier of Apple's iPhone 4, which has been selling out in stores across the country since it's launch in late September.

But the company faces challenges in the forms of handling higher data volumes while seeing revenues from traditional voice services decrease, Zhang said. At the same time, China Unicom has growing competition from Internet companies entering the mobile industry. One such areas has been in the development of app stores, which many telecom operators see as a potential revenue stream that is at risk of being lost to companies like Apple or Google.

"Many new challengers such as Apple, Google, Nokia,  Microsoft  have entered in this industry and have launched their own app stores," Zhang said. "Operators are facing a challenge of being isolated by others in this industry chain."

To face the changes in the industry, China Unicom is working at developing new platforms for its users, Zhang added. China Unicom officially launched its  own  app  store  in China earlier this month. Rivals China Mobile and China Telecom, have also launched their own.

China Unicom would not be the first carrier in the country to promote its own mobile operating system. The country's largest operator,  China  Mobile , developed its OMS (Open Mobile System), calling phones installed with it, Ophones. OMS, however, is based on Android and was tweaked to better localize it for the China market.