iPhone - What does this say about China

There has been a mystery with iPhones, on why are only 2/3rds of them have been activated. 3.7 million were sold last year, and only 2.3 million activated. So where are the other 1.4 Million Phones. It seems at least 400,000 are in China. NY Times article that gives some insite into the issue. Smugglers Return iPhones to China Business Week's article, Inside the iPhone Grey Market is interesting.

So what does this huge amount of phones being exported to China, say about Chinese society today?

Some semi-educated guesses:

1. The latest Electronics (especially Cell Phones) are status symbol in China.
2. Cell Phones are very visible symbols of your wealth. Which is why they pay $555 and more, for an iPhone that costs $400 in the US due to the status.
   
3. Lots of Internet is viewed on mobile phones in the cities, unlike the US.
4. Apple has great branding, even in China.
5. Apple has a better interface than other competitor phones, even in Chinese.