China Unicom has cut the prices of contracts involving iPhones by almost 1,000 yuan, but pirated phones still remain many buyers' favorite choice.

A clerk, surnamed Wu, at China Unicom's Zhongguancun store, said consumers can now pick up an 8Gb version of the real thing for 4,999 yuan, down from 5,999 yuan. The 16Gb phone also dropped from 6,999 to 5,880 yuan, with the largest memory option, the 32Gb phone, down from 7,999 to 6,999 yuan. All the phones are offered on two-year contracts.

In addition, there is a new economical package that costs 96 yuan per month with 3G-capability, 30 yuan less than the previous cheapest choice, which Wu claims is extremely popular.

However, despite the recent price cuts, China Unicom, which monopolizes iPhone's dealerships, is having trouble competing with unofficial routes.

"You can get hold of a smuggled 8Gb iPhone for just over 3,000 yuan, almost 2,000 yuan cheaper than the official price," said a vendor surnamed Chen at Hilon Electronics City.

"Additionally, if you buy an iPhone through the official channels, you can't enjoy WiFi access like you can with a smuggled version," he said.

When asked what would happen if the smuggled goods broke, another pirated Apple salesperson at Hilon, who asked to remain anonymous, told METRO there is nothing to worry about.

"It is very unlikely. But, if it does occur, you can easily have your smuggled iPhone repaired at Sanlitun. Prices vary depending on how serious the problem is," he said.

Lu Xiaowei, 26, a self-proclaimed "electronics lunatic", told METRO the reduction in iPhone prices from China Unicom was still far from appealing for most consumers.

"In fact, as far as hardware configuration is concerned, there are several other intelligent cell phones that can compete with Apple's iPhone, such as Google's Nexus One, HTC's HD2 and Motorola's ME600. The iPhone is no longer miles in front," he said.

"If I were to buy a certified iPhone, I would get it from Hong Kong, mainly because it comes with WiFi," Lu said.

"Apart from that, I've heard it is about 500 yuan cheaper and it is not too inconvenient to have my iPhone repaired in Hong Kong," he said.