Iphone hits China

It's always been made in China, but this is the first time it's been sold in China. The iPhone officially goes on sale today at Apple and telecom partner China Unicom's stores across the mainland. But it's got an eye-popping price tag from 700 to more than 1000 U.S. dollars, and the catch is the first batch of iPhones do not have Wi-Fi, that's in compliance with the Chinese government regulations. Now unofficially, the iPhone has been selling on the grey market in China for more than two years. It's estimated two million iPhones are already being used here, most of them smuggled in from the U.S. and Hong Kong. We went to Beijing's biggest electronics market to see how it's done.

Not only do they have Wi-Fi, but iPhones on the grey market in China are cheaper, too.
"Is it really easy to get?"
"Yes."
"Very convenient", she says. "I've just popped in a SIM card and downloaded the applications I wanted."
I decided to try for myself.
"Do you have iPhones? How do I know that this is real?"
"This one is new. You can believe me. You must believe me."
"Okay, so this is a real iPhone that they smuggled in from the United States."
We're tring to log on to BAIDU.COM, China's largest search engine, and there it is - Wi-Fi enabled.
"So how much is this? Alright, now we start the bargaining process."
She agreed to sell it to me for less than $500, then there is the rest of the competition, like counterfeit iPhones.

He's saying he'll sell it to me for 600 yuan, less than 100 dollars.

And the soon-to-be released Ophone from China Unicom's rival, China Mobile. On top of that, analysts say Unicom has set iPhone prices too high for average consumers and advertising has been scarce.

"China Unicom, however, has not shown itself to be very adept at marketing. I'd like to say that China Unicom has never missed an opportunity to miss an opportunity."

So there definitely are some skeptics out there about how well the iPhone will do in China. A limited selection of the applications can be purchased online at the Apple Store, but Unicom says the phone will pay for itself if you buy a two-year coverage plan and whether it's selling on the white market or the grey market, analysts say Apple is happy. It's all about volume and Apple is playing a global game.