Police in Shanghai have arrested five people for making fake iPhones, state media said Friday, just as Apple fans overseas wait with bated breath for the launch of the US giant's newest model.

The craze for all things Apple in China has triggered widespread cloning of iPhones and iPads. In July, an American blogger even uncovered fake Apple stores in the southwestern city of Kunming.

Police said the Shanghai gang scavenged parts from discarded iPhones and combined them with counterfeit components to create the fakes, which were then sold, the official Xinhua news agency reported.

The raid on the gang took place in July, and police seized more than 200 fake iPhones and other parts valued at five million yuan ($780,000) from a workshop in a rented apartment, it said.

It was unclear whether the gang members were arrested then or in September, and local police could not be reached for comment on Friday.

The bogus iPhones sold for more than 4,000 yuan each, close to the price for the genuine article, the Shanghai Daily newspaper reported.

The news comes as speculation mounts that Apple may unveil its next generation iPhone as early as October 4, after the US technology giant sent out invitations for an unspecified event on that day.

The launch is sure to trigger huge excitement in China, which has the world's largest online population with over 500 million users.

Some die-hard fans queue for days to get their hands on the latest Apple products.

Apple only has five official stores in mainland China -- two in Beijing and three in Shanghai -- although more shops are authorised to sell its products, while others offer those smuggled in from overseas markets.

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