Apple Peel, which turns iPods into iPhones, coming to US

The Chinese-developed Apple Peel 520 allows a user to turn their iPod Touch into a smartphone

The Apple Peel 520, a Chinese-developed product that drew the media's attention for being able to turn an iPod Touch into an iPhone-like device, is coming to America.

The add-on device, which just went on sale in China, has been billed as a more affordable option for users wanting to get their hands on an iPhone, but lack the budget. The Apple Peel is a protective case equipped with a dock connector, battery and SIM card, that slips on to an iPod Touch. Once connected and properly installed, the device will allow the iPod Touch to make phone calls and send text messages.

Earlier this month, solar technology company GoSolarUSAsigned an agreement with the Chinese developer of the Apple Peel, Yoison Technology, to develop the device, file it for a U.S. patent and distribute it in America. The first demonstration models of the Apple Peel will arrive in America this week, GoSolarUSA said in a statement on Monday.

"As soon as they arrive, we'll begin distributing demonstration models to retail buyers across the country," said GoSolarUSA CEO Tyson Rohde in a statement. "The amount of interest in this product that we've received from distributors has been staggering."

The Apple Peel features five hours of talk time and 120 hours of standby use on its battery. GoSolarUSA has yet to offer a retail price for the add-on. But Yoison Technology is selling the device in China for 520 Yuan ($US77).

Yoison could not be reached for comment. But the company plans on releasing 2,000 Apple Peels this month in China, according to Yoison's online auction site. Other knock-off versions of the device are already being sold online in China.

The release comes after Apple launched its iPhone 4 in China last week. The smartphone is so popular that its already in short supply among retail outlets selling the device. Purchasing an iPhone 4 without a contract in China is slightly more expensive than it is in America. The 16GB model costs 4,999 yuan ($744), while the 32GB model costs 5,999 yuan ($893).

The shortage of iPhone 4s and the high price are reasons why the Apple Peel may find a strong following in China. Prices for Apple's latest iPod Touch range from 1,798 yuan ($269) for the 8GB model up to 3,198 yuan ($478) for the 64 GB model.

How the Apple Peel will fare in the Chinese market will depend partly on how consumers perceive the price gap, said Flora Wu, an analyst with Beijing-based consulting firm BDA. "The iPhone 4 will decrease in price over time, and so if the price gap is small, the incentive won't be as big."

But the Apple Peel is a notable example of "reverse innovation," in which Chinese developers have found ways to tweak products from foreign countries and make them more suitable for the domestic market, Wu said.

"I think there will be a market for the device," she added. "But the market potential will depend on the price gap and how well the user experience is."

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