What’s more, Apple had to strip out Wi-Fi functionality from the phones to comply with a Chinese regulation banning the technology. The ban has since been lifted, but not before Chinese iPhones went into production. Gray market phones sell anywhere between 32 percent to 59 percent less than the iPhone and include Wi-Fi, according to Cynthia Meng, an analyst at Bank of America Merrill Lynch.

Pricing, though, gets more complicated when you throw in China Unicom’s subsidy. To get the subsidy, users have to commit to one of the 8 levels of 3G service packages on offer, which cost between 126 yuan ($18) to 886 yuan ($130) a month. The higher the service plan, the larger the subsidy. Over the course of 24 months, the iPhone could work out 10-27 percent cheaper than their gray market counterparts on the same China Unicom plans—but that all depends on if a consumer is willing to look at the cost of the device over a 2-year period, and how much they value Wi-Fi.