Report: Apple iPhones on Sale in China

The iPhone can be bought in China, even though Apple Inc. (AAPL) isn't selling it there and the gadget doesn't function properly despite costing twice as much as in the United States.

Enthusiasts willing to pay 8,800 yuan ($1,170) can buy the iPhone at electronics markets in Beijing, Shanghai, Shenzhen and Guangzhou, the computer and electronics newspaper Dian Nao Bao reported in its Monday editions.

In the United States, the combination cell phone-iPod media player can be had for as little as $499. The Chinese version can make calls and send text messages, but it can't receive calls. The voicemail function also doesn't work.

[Video clips of well-made, but clearly fake, iPhone clones have been all over YouTube for weeks. It wasn't clear whether Dian Nao Bao was referring to the fakes, or to the real things in its report.]

Apple is currently selling the iPhone only in the United States, where it's restricted to AT&T Inc.'s (T) cellular network. Last month, hackers were successful in unlocking the device so that it could be used on other carriers.

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Apple spokesman Natalie Kerris said Tuesday the company was not aware of specific reports of its phones being sold in China but said the sales were not authorized.

"We said we would launch the iPhone in Asia in 2008," she said. "This is not that launch."

The iPhone, which went on sale in the U.S. to great fanfare in June, combines an intuitive touch-screen interface with the media-playing abilities of the iPod.

China already has the world's largest number of mobile phone users and the market is expected to grow rapidly in coming years as incomes rise.

The government says the number of Chinese mobile phone subscribers should reach 520 million this year, up from 460 million in 2006.

The iPhone comes amid Apple's surging popularity among young Chinese urbanites. Many groove to tunes on iPods as they walk around town, while others hang out in coffee shops and surf the Internet on Mac laptops.

One Beijing shop owner told Dian Nao Bao he gets about 30 iPhone inquiries a day, and customers don't care about the price or that the phone isn't fully functional.

The phones come from the southern industrial boomtown of Shenzhen, another vendor told the paper. The report did not say how the phones got to China in the first place.

Dian Nao Bao said agents with the Beijing Administration for Industry and Commerce recently seized several iPhones from the Zhongguancun electronics market.

Phones at the administration rang unanswered after business hours Tuesday.