Asia underground market awaits iPhone
Pirated mobile market all over Asia is eagerly awaiting for the launch of latest iPhone as Apple Inc.officially rolls out its newest iPhone in Asia on Friday. Pirates are already working out for making fake of the latest model. In India lot of people of use iPhone although officially it is yet to be launched.
As Apple Inc. rolled out its newest iPhone in Asia on Friday, dealers and buyers said it's only a matter of time — maybe as little as a few days — before the popular device hits the region's thriving underground marketplace.
iPhones are nothing new to Asia, where enthusiasts from Bangkok to Shanghai already sport fake and unlocked models of the first generation, which was unveiled last year.
Now, electronics markets are preparing for an influx iPhones capable of 3G, or third-generation, cell phone technology after the official release in Japan, Australia, New Zealand and Hong Kong of the new Apple unit.
In the Chinese territory, ads pitching unlocked iPhones and services to unlock them were everywhere in a shopping mall with three floors of cell-phone stores.
Shop owner Chris Lau said he's already 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 the practice of hacking iPhones' computer code so they can be used with different mobile service providers.
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 stocks at Beijing's Nurenjie shopping complex, a known center for sales of smuggled iPhones located across the street from the new U.S. Embassy. Apple does not sell the iPhone in China, but unlocked versions brought from other markets are plentiful.
Demand for the new device was running high, with some dealers saying unlocked 3G-ready iPhones should fetch about 5,000 yuan ($700) once they're available. The majority will probably come from the U.S. and Hong Kong, they said.
"Many people have called to order the 3G iPhone, but we simply don't have the merchandise," Chang Wei of Xiaowei Telecommunications said.
Online auction sites, however, were offering the iPhone by midday — for the right price. Sellers on one mainland China site, taobao.com, were asking 9,359 yuan ($1,369) for the 16-gigabyte version.
Apple plans to sell its 8-gig iPhone for $199 in the United States and the 16-gig version for $299. It's selling in Japan for 23,040 yen ($215) for the 8-gig model, while the 16-gig version costs 34,560 yen ($320).
Hong Kong's iPhone comes unlocked but buyers still must purchase a two-year mobile contract; the 8-gig phone goes for 2,938 Hong Kong dollars ($376).
On a Yahoo.com site catering to Hong Kong, one seller was peddling 8-gig phones purchased in New Zealand for HK$9,500 ($1,217). "Its going very fast! sold 2 in 20 mins," the seller wrote.
Representatives from Apple and its service providers in Japan and Hong Kong declined to comment on the gray market or discuss any countermeasures they might take.
Not that Apple isn't likely keeping watch over the situation. Last year the company threatened to take legal action against Singapore retailers it accused of selling unlocked phones unless they stopped, according to local media reports.
Aside from lawsuits, the company could take steps from tracking buyers and serial numbers, to auditing distributors and resellers, who are typically the biggest risk in the supply chain, said Steve Vickers, president of business security consultants International Risk.
But limiting underground sales becomes all the more difficult when you have a product so widely available as the iPhone.
"There would be less risk if you could keep it under wraps," Vickers said. "But eventually you have to sell it."