Apple’s iPhone 5 has unofficially landed in China, where it costs as much as $1,700

It’s been less than a week since Apple began selling the iPhone 5, but already the device has made its way into China. Grey market resellers are selling the flagship smartphone with over 100 percent markup to mainland customers who aren’t willing to wait the few months for it to officially arrive.

After hearing scattered reports of substantial iPhone 5 market, I decided to check things out for myself. Outside of Apple’s flagship Sanlitun Village retail store in Beijing on Monday, several unauthorized vendors were peddling the iPhone 5.

One scalper standing outside the entrance quoted a steep price of RMB 10,800 ($1,714) for a 16GB iPhone 5 brought in from Hong Kong over the weekend. When asked if he’d sold many devices at that rate, he said customers had bought two on Sunday and one on Monday morning.

On a staircase around the corner from the store, a group of sellers offered an iPhone 5 for RMB 9,500 ($1,507). They did seem aware that the price is unreasonably high, as they offered to lower the price in a couple days after demand has settled down.

The iPhone 5 did not seem to have reached a nearby market that sells knockoff goods and electronics, though counterfeit iPhone 5s have already arrived. One vendor offered to sell one for RMB 600 ($95). According to him, the knockoff devices use the same software as shanzhai, or counterfeit, versions of earlier iPhone models, but is taller and wider.

I also called a vendor in Zhongguancun, one of the most popular areas for buying electronics in Beijing. He cautioned that the iPhone 5 is “way too expensive” right now, quoting a rough price of RMB 9,000 ($1428) for his store and others nearby. He said secondary market prices for the iPhone 5 should come down about RMB 1-2,000 in the next few weeks.

Meanwhile, Mobisights reports that the iPhone 5 can be found in Beijing for as low as RMB 8,000 ($1,270). By comparison,the iPhone 5 starts at HK$5,588 ($720) in Hong Kong.

After the iPhone 5 arrived in Hong Kong and eight other countries last Friday, resellers promised to have iPhone 5 units available in Beijing by later that evening.

Apple’s growing retail presence in Hong Kong has made it easier for scalpers to smuggle iOS devices into China. The most recent iPad launch and last week’s iPhone release both included Hong Kong from Day 1. The company has adopted a pickup and reserve system in both Hong Kong and mainland China in order to curb scalpers from buying up all the initial inventory. The iPhone maker is opening up its second retail store in Hong Kong later this week.

The iPhone 5 is expected to officially arrive in the country by the end of the year. China Unicom executives have confirmed that, pending regulatory approval, the handset should hit the market within three months of last week’s launch.

Image credit: TNW