A vender at Zhongguancun electronic products market shows a smuggled iPhone yesterday. China Unicom said 80 percent of iPhones smuggled into the country are refitted versions. [China Daily]

Despite warnings that up to 80 percent of smuggled iPhones on the market are fake, there is strong demand for bootleg handsets in Beijing.

China Unicom has reported lackluster sales of just 100,000 since the iPhone was officially launched in China on October 30.

It came about three years after iPhones were first smuggled in to the country from the United States and other countries for sale on the underground market.

While some of these handsets are authentic, China Unicom said that up to 80 percent are "refit phones" which contain a few iPhone parts encased in a fake handset.

Vendors in Etopone, one of the biggest electronic markets in Zhongguancun, told METRO that there is strong demand for smuggled iPhones.

In the basement of Etopone, hundreds of vendors sell smuggled handsets, including Nokia, Samsung and Motorola, and about 70 percent sell iPhones.

"If so many smuggled iPhones, as China Unicom said, were not new and easily broken, how could there be such great demand in the market," one vendor said.

"I can sell about five iPhones in one day."

According to China Unicom, an iPhone without a service contract costs about 6,999 yuan (US$1,025), compared with US$299 in the US.

In Etopone, a smuggled iPhone with 8G memory costs about 3,700 yuan.

Zhang Xucheng, a 29-year-old consultant, said most of his friends bought smuggled iPhones because they were cheaper.

"If you buy one from China Unicom, you have to buy a new telephone number to access 3G because it does not have a WiFi function," Zhang said.

"You can download free software for the smuggled iPhone, but for iPhones sold by China Unicom, you can only buy software on the official website," said Zhang.

Another Etopone vendor, who has sold smuggled handsets for three years, said there are used and rebuilt iPhones sold on the market, but that these were cheap and easy to recognize.

"The market for smuggled iPhones and Blackberry is very large because we took the initiative to bring a fashionable digital product to China, where millions of people, especially the youth, were waiting for a long time," the vendor said.

"The used or rebuilt ones need to be changed with new shells. If you touch the surface carefully, you will find that the edge of the shells are not smooth as new ones."

(China Daily December 14, 2009)