8/8/2019 Schemers Fill an iPhone Void in China

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By Bruce Einhorn and Chi-Chu Tschang

Want to buy an iPhone in Beijing?

Liu Yong is your man. Apples hugely

popular mobile device isnt legally

available in China. Yet at Lius elec-tronics shop near the capitals premier

universities, you can buy one or $680.

Never mind that Apple hasnt autho-

rized any Chinese cellular operator to

oer the iPhone. Lius iPhones have

been hacked so they can be used locally,

and inputting Chinese

characters on its touch

screen is a cinch.

There still is one big

problemthat is, i the

phone happens to break. I theres a

soware problem, we can x it or you,

says Liu. But i it drops and breaks,

then youre out o luck. The handsets

Liu sells were purchased abroad and

then smuggled into the mainland.

Other dealers market clones that were

illegally made in China. Consumers

who crave the comort o warranties

will have to bide their time until Apple

inaugurates its rst China store in time

or the Beijing Olympics next summer.

For many Chinese, though, thats

simply too long a wait. More than

160 million are now plugged into

the Internet, which has helped stoke

iPhone mania on the mainland. Forstatus-conscious urbanites who

regularly upgrade their phones, this is

the must-have gadget. The iPhone

is considered by many Chinese to be

the best phone out there, says Shaun

Rein, marketing manager at China

Market Research Group in Shanghai.

Strangely, Steve Jobs and company

seem to be in no rush to leverage the

iPhones popularity in what is the

worlds biggest cellular market, with

528 million mobile users. The mul-

timedia handset debuted in the U.S.

in June, and went on sale in Britain,

Germany, and France last month.

Apple plans to open a store in Beijing

in mid-2008. And rumors are fying in

Chinese tech and telecom circles that

Apple is in talks with the countrys

No. 1 cellular operator, China Mobile.

Neither o the companies would con-

rm that they are in negotiations over

the iPhone.

I a deal is indeed in the works,

count on China Mobile to drive a hard

bargain when it comes to prot-

sharing. China Mobile is the worlds

largest cellular carrier, with 369 mil-

lion subscribers, equal to a 70% mar-

ket share o the mainland. There is

no need or it to make the kind o deal

that American and European operators

have been making, says Dave Carini,

an analyst with the Beijing-based

research rm Maverick China. ^

With Peter Burrows in

San Mateo, Calif.

ScemersFll

PoeVodCApple aims to open shop in Beijing next year; in the

meantime, smugglers and counterfeiters hack away

Dece mbe r 24, 2007 I BUSINESSWEEK

A counterfeit

Apple iPhone

for sale in

a Shanghai

market