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China Mobile running 400,000 unlocked iPhones

Around one-tenth of all iPhones sold in 2007 wound up unlocked and in use on China Mobile's network, which shows serious iPhone demand in China but represents lost revenue for Apple and its partners.

As many as 400,000 unlocked iPhones were running on China Mobile's cellular network at the end of last year, according to market research firm In-Stat.

Apple sold 3.7 million iPhones in 2007, and more than 10 percent of them are in China, In-Stat said, attributing that information to China Mobile. That helps explain part of the "iPhone gap" created by the difference between Apple's shipping totals for 2007 and the activations reported by its carrier partners in the U.S. and Europe.

Somewhere around 1 million iPhones are thought to have been unlocked, and 400,000 are in China. CNET Networks

Despite Apple's attempts to keep iPhone unlocking under wraps with new software and changes to the iPhone's bootloader, enterprising entrepreneurs are apparently giving the people what they want. This is a bit of an opportunity lost for Apple, since the company has signed lucrative revenue-sharing deals with its carrier partners that don't apply if an iPhone is unlocked from its respective network.

But, as In-Stat noted in a report, at least it shows people want the iPhone. The firm said Chinese consumers want smartphones with multimedia features and Web browsing, and the iPhone fills that need nicely. And they're willing to pay for it: 20 percent of smartphones sold in China last year went for 4,000RMB ($533) or more.

Apple had at one point discussed the iPhone with China Mobile, but Apple CEO Steve Jobs downplayed the significance of those talks, saying the companies just had a single meeting. The iPhone is set to make its official debut in Asia at some point in 2008, probably sooner rather than later, but it's clearly a hot item in China already.