Gray Market iPhones Heat Up China

The iPhone will officially come to mainland China later this year, though analysts say not to expect huge numbers of sales. But judging from the thirst for unofficial, jailbroken phones among the Chinese, analysts might be surprised.

China, with its 687 million subscribers, is a large, lucrative target for Apple Inc., considering that the country is its fastest growing for notebooks and iPods. But analysts say steep competition from No. 1 cell phone maker Nokia will make it a rough road for Apple. And the iPhone doesn’t have a great track record in the region: IDC said only 7 percent of total iPhone sales in the second quarter came from Asia-Pacific. Almost half of its sales were domestic.

But that said, there are people in the Middle Kingdom willing to pay $800+ for an iPhone. Jailbroken – or rogue – handsets can be found in Beijing’s Zhongguancun electronics district and other mobile markets in the cities. Many Chinese ask traveling friends to bring them back from the United States and then proceed to unlock them from AT&T. In Hong Kong, where the iPhone is officially available, legally unlocked iPhones go for about $580 to $810 and business is good.

There are also “shanzhai” (knockoff) versions available at markets, known variously as “HiPhone” the “iPhone Mini” and the “iOrgane.”

Chinese consumers are more than willing to pay big now for a gray-market phone. “To some extent, iPhone and other Apple products are considered a status symbol,” one such user told the Wall Street Journal.

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