The whole story may create a whole new wave of iPhone problems, but this time we'll talk about iPhone with disabilities and, even worse - intentional ones. While some analysts claim that Beijing hasn't approved yet the use of Wi-Fi and 3G-enabled phones, I wouldn't bet on that. Anyway, the speculations go as far as to say that Foxconn is waiting for authorization to start shipping iPhones to China Mobile, iPhones having the W-CDMA and Wi-Fi chips disabled!
While blaming the Chinese authorities for not allowing Wi-Fi and 3G capabilities to be used on the country's territory by its own citizens is a good way to cover a monopolist behavior, the truth may be that China Telecom's network supports W-CDMA, and China Mobile's uses the local TD-SCDMA format.
Anyway, the Chinese market is already flooded with black market iPhones from Apple, as well as a lot of clones, and - no matter if Apple decides to take out 3G and Wi-Fi - I firmly believe their "wonder phone" won't behave as well as expected on that market. In the end, remains to be seen, but this is what I think, and it's surely going to be extremely interesting to watch it happening...or not!