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‘Apple Peel’ Inventors Defend Device Turning IPod Into IPhone

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Sept. 23 (Bloomberg) -- Pan Lei and Pan Yong, the Chinese brothers who invented a device to convert Apple Inc.’s iPod Touch into an iPhone, say they are innovators, not copycats.

Their Apple Peel 520 is a case including a circuit board and battery that wraps around the iPod Touch media player, allowing calls to be made after software is installed. The device, which requires breaking into Apple’s operating system, isn’t a counterfeit iPhone, Pan Lei, 25, told Bloomberg Television.

“We’re capable of coming up with something original,” Pan Lei, who quit his job as an interior designer to found Shenzhen, China-based Yosion Technology Co. with his 23-year-old software-engineer brother, said in an interview broadcast today.

The iPod music player has sold more than 220 million units since it was first released in 2001, according to the company. Apple first released its iPhone in 2007, climbing to 2.7 percent of the global market by June this year and sparking copycat models from Chinese grey market, or Shanzhai, vendors.

“The brothers who invented this Apple Peel probably ran down a list of how many ways could they annoy Steve Jobs,” said Jonathan Hudis, chairman of the American Bar Association’s Trademarks and Unfair Competition Division. “I could not see Apple standing by to let this continue, especially if it results in product shipping into the United States.”

U.S. users can save at least $770 by using the device to be priced at $60. Jill Tan, a Hong Kong-based spokeswoman for Apple, said any product that’s been tampered with won’t receive warranty support. Apple is aware of Apple Peel, she said, declining to comment further.

“Very Creative”

Apple Peel sells for 520 yuan ($78) on Taobao.com, China’s largest online shopping site. Yosion agreed to offer the device in the U.S. with New Orleans-based Go Solar USA Inc., whose website teaches users to “jailbreak” the iPod Touch in preparation for installing Apple Peel software.

U.S. users must sign a two-year contract with AT&T Inc. for the iPhone, paying at least $39.99 a month and $99 for the iPhone 3GS, or a total of $1,059. The iPod Touch sells from $229.

“We’re also very creative,” Pan Lei said. “Not just getting a Nokia phone and copy, getting Apple and copy, or a Samsung phone to copy as well. It shouldn’t be like that.”

Apple’s iPod music player has sold more than 220 million units since it was first released in 2001, according to the company. Apple first released its iPhone in 2007, climbing to 2.7 percent of the global market by June this year and sparking copycat models from Chinese grey market, or Shanzhai, vendors.

Apple sold 8.7 million iPhones globally in the second quarter, taking 2.7 percent of the market and trailing Nokia Oyj and Samsung Electronics Co., according to Gartner Inc. Apple sold 1.7 million of its latest handset, the iPhone 4, within three days of its June 24 release, it said in a statement.

To contact the reporters on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net; Margaret Conley in Hong Kong at mconley3@bloomberg.net.

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net.