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iPhones smuggled abroad

After iPhones are produced, but before they come to the U.S. thousands are smuggled to all corners of the globe. This may account for the discrepancy between the 2.3 million iPhones registered on American or European networks, and the 3.7 million that were sold last year. Apple's restricted business model and out-of-control demand abroad could cost the company over $1 billion in the next three years according to the New York Times.
CNET News reported that as many as 400,000 people are using iPhones in China. It costs as much as $200 more to purchase an iPhone there, so many are asking friends in America to pick one up for them.