Just under half a million iPhones are being used in China, even though the handset is not officially on sale there, according to reports from market research firm In-Stat.
The network operator, China Mobile, claims that 400,000 iPhones were in use in the country at the end of 2007, all of which were unlocked.
If these claims are accurate, then 10 per cent of iPhones sold worldwide at the end of last year were being used in China.
Apple has yet to release the iPhone in the Chinese market, despite the enormous sales potential, although Steve Jobs has held talks with mobile carriers in the country.
Previous research has shown that even in countries where the iPhone is available, a quarter of users still prefer to unlock the handsets.
The same research from Bernstein Research analyst, Toni Sacconaghi, showed that nearly 1.5 million handsets were "missing in action" at the end of 2007. China Mobile's claims could account for a third of those iPhones.
Apple was unavailable for comment at the time of writing.
