iPhone 4 prices plummet 70 per cent in China

Reports of reception problems have caused demand for the Apple iPhone 4 on the grey market in China to plummet, with sellers slashing the price of the handset by up to 70 per cent.

Official Chinese news site China Daily reports that the price of the US version of the handset on China's shady grey market has fallen from around 20,000 yuan (£1,900) to just 6,000 yuan (around £570) over the last month, as public confidence in the phone has taken a knocking.

Apple has been beset by negative publicity around the globe over the so-called 'death grip', with iPhone 4 handsets losing their reception when held in a particular way - allegedly due to a flaw in the design of the phone's external antenna.

Initially, the problem was passed off as a software glitch. But with reports persisting, Apple CEO Steve Jobs was forced to call an emergency press conference at which he claimed all smartphones suffered from the same issue, and offered buyers a free rubber bumper to alleviate the problem.

The iPhone has not been officially launched in mainland China, where the device is manufactured by contractor Foxconn - itself the subject of controversy over workers' pay and conditions, after a spate of suicides among its workforce - but news of the massive discounts being offered for under-the-counter sales be a concern for Jobs and Co, who plan to launch the device in Hong Kong at the end of this month.

When the new phone was launched, many in China saw it as a must-have status symbol. Now, however, the mood among customers is decidedly nervous.

"Countless customers have inquired about the phone," complains Liu Hailing, one of the biggest Apple vendors in Beijing's Zhongguancun electronics shopping district. "But the device's signal problem is always the very first question they ask. After that the price drops dramatically."

Even at its new low price of 6,000 yuan, says Liu, "Very few people buy it - even after we assure them that the signal is no longer a problem... Compared with earlier versions of iPhones, sales of the iPhone 4 are sluggish at best."

Wary of being left with unsellable stock on their hands, vendors in Beijing are looking at rival models.

"We would rather sell other phones, because at least customer won't complain after delivery," said Wang Huan, another vendor from Zhongguancun.