A recent scour of the cell phone markets in Beijing shows where at least some of the 250,000 iPhones sold in the US, but never activated with AT&T have ended up. For a $150 mark-up off the US retail price ($400 for the 8GB model), unlocked iPhones are available for purchase at no less than two large shopping centers - Yaxiu, which is notorious for selling all types of fake branded goods and is a popular tourist shopping stop, and Nurenjie, a popular shopping area frequented by local trendsetters and fashion enthusiasts. Locked iPhones brought to the Landao computer store in downtown Beijing can be unlocked in a few hours for a RMB 500 fee (~$67).
These gray market iPhones, however, still only make up a small portion of the gray market handset sales in China, which we estimate to be as high as 25% in urban areas and over 40% in rural areas. In most electronics retail outlets in Beijing, grey market handsets are readily available. Readily available gray market handsets include illegally imported iPhones and Blackberries, as well as knock-off Sony Ericsson, Nokia, and Motorola handsets.
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