Apple

Want to buy an iPhone in Beijing? Talk to Liu Yong. Apple’s ( AAPL ) wonder isn’t legally available in China, but Liu, who operates an electronics shop in the Zhongguancun neighborhood close to the capital’s premier universities, has plenty of inventory and is more than happy to sell you one for about $680. Don’t worry that Apple hasn’t authorized any Chinese cellular operator to serve the iPhone; the software in Liu’s iPhones is hacked to enable you to use the phone locally.

Inputting Chinese characters on the iPhone’s touch-screen is no problem either, he says. But buy now, he warns, because prices are heading upward as demand for the world’s coolest phone is increasing. There still is one big problem if the phone happens to break. Liu, after all, isn’t exactly an authorized Apple dealer and nobody selling iPhones in China is either. That’s because, according to Apple, iPhones aren’t supposed to be sold in China.

If there’s a software problem, we can fix it for you, Liu says. But if it drops and breaks, then you’re out of luck. That has not deterring determined consumers from buying iPhones from rogue dealers like Liu in big Chinese cities like Beijing and Shanghai. With more than 160 million Chinese surfing the Internet, it’s easy for people to follow the latest trends in the U.S. Moreover, many upscale Chinese regularly upgrade their phones to the latest high-end model.

And there’s now nothing more high-end than Steve Jobs’ creation. There is a real pent-up demand for the iPhone, says Shaun Rein, marketing manager at China Market Research Group in Shanghai. The iPhone is considered by many Chinese to be the best phone out there. Finding people selling iPhones in Chinese cities, in districts such as Beijing’s Zhongguancun or in the big IT shopping centers in Shanghai, is a snap.