It may not be shocking news that Apple's vaunted iPhone is currently on sale in Chinese electronics stores despite the fact that Apple doesn’t plan to sell them there until 2008. What is more surprising is that Chinese consumers are willing to pay $1,170, twice the already steep U.S. price, for a phone that doesn't even work properly. According to the AP, the phone can make calls but not receive them and has no functioning voice mail. In spite of these seemingly major drawbacks, one Beijing shop owner claims to be getting about 30 inquiries about the phone every day.

This type of unauthorized sale, when a manufacturer makes more of a product than the client requests in order to sell it on the black market, is known as "third-shift" counterfeiting and has become increasingly common as more companies outsource their production overseas. The iPhone is assembled in Shenzen, which is likely the source of the unauthorized models. To sum up: Chinese citizens are willingly paying twice as much for an inferior, illegal version of a product that is made in their own country. Oh, what a tangled supply chain we weave.

(Oh, and in case you're wondering what the latest Apple hoopla is all about, Steve Jobs introduced a new iPod nano today that he dubbed "the fatty".