The negotiation between Apple and China Mobile is likely to go on for a long time, China Mobile wants the iPhone 3G to be shipped Wi-Fi and 3G disabled. This way users will use the home grown TD-SCDMA and the carrier will be assured that users do not unlock their devices and jump to other rival networks. Apple is not so happy about the demands. Now, Apple has found a new way to deal with this unusual demand of China Mobile.

For the first time, Apple has started selling unlocked iPhone 3G in Hong Kong, a kind of back door marketing. This comes after the failure of many rounds of talk with China Mobile, the carrier that we believed will launch the iPhone in China.

To cut the long story short, the 8GB and the 16GB models are available for HK$ 5,500 and HK$6,200 equivalent to US$694 and US$797 respectively. The unlocked iPhone 3G is available via on-line Apple Store, Hong Kong.

This is part of the T&C of the sales:

iPhone 3G purchased at the Apple Online Store can be activated with any wireless carrier. Simply insert the SIM from your current phone into iPhone 3G and connect to iTunes 8 to complete activation.

The terms and conditions limit the sales only in Hong Kong, but the 1 billion fans in mainland China are not going to let this opprotunity slip.

This move from Apple also terminates its contract with Hutchison Telecommunications which has been selling iPhone 3G since July 11 to customers in Hong Kong on a 2 year contract.