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Asia's Gray Market Awaits IPhone

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The Associated Press

Published: July 12, 2008

HONG KONG - As Apple Inc. rolled out its newest iPhone on Friday, dealers and buyers were anticipating the popular device in Asia's thriving underground marketplace in as little as a few days.

The iPhones are nothing new to Asia, where enthusiasts from Bangkok to Shanghai sport fake and unlocked versions of last year's models - unlocked so they can work with any carrier, not just the Apple-authorized ones.

Now, electronics markets are preparing for an influx of iPhones capable of 3G, or third-generation, cell phone technology.

In the Chinese territory, ads pitching unlocked iPhones and services to unlock them were posted throughout a shopping mall with three floors of cell-phone stores.

Shop owner Chris Lau said he already has taken orders for the new iPhone from 40 people and estimated its arrival on the gray market in about a week.

"I'm not 100 percent sure the stocks we are receiving will be unlocked, but I don't think it will take long to crack it," he said, referring to hacking the computer code so phones can be used with different service providers.

The legal purchase of an iPhone usually locks a buyer into a service provider partnered with Apple, such as Softbank Corp. in Japan.
Candice Lam was among those considering a gray-market purchase because she didn't want to be locked into paying for a two-year contract with Apple's local carrier, Hutchison Telecom.

"Some of my friends are already using it. I want to have one myself," the 20-year-old university student said while browsing phone shops. "I already have a contract with one operator. I don't want to sign another just for a phone."

Vendors didn't have any iPhones in stock at Beijing's Nurenjie shopping complex, a center for sales of smuggled iPhones across the street from the new U.S. Embassy. Apple does not sell the phone in China, but unlocked versions imported from other markets are plentiful.
Online auction sites were offering the iPhone by midday.

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