Where are all the iPhone 6 and iPhone 6 Plus units going? Apple on Friday opened its stores in America to welcome the thousands of hip, nerdy, young-ish crowd of Apple fans who were eagerly waiting to get their hands on the new Apple smartphone. Joining them are hundreds of non-fans who are looking to make a buck by selling the new iPhones for as much as three times their retail price in China.
The long lines of excited buyers waiting outside the Apple store eager to get their hands on the latest iPhone have seen a marked change. Instead of the true-blue, hard-core Apple fans camping outside communing with their fellow iPhone devotees, the lines outside many Apple stores in the country are composed largely of resellers who wanted to buy several units to sell to other people at a huge mark-up.
Cult of Mac reports that, in San Francisco, CA. at least the first 50 people waiting in line said they were buying iPhones to sell to other people. The situation was the same in Apple stores in Seattle, WA and Louisville, KY.
Over at New York City's Upper West Side Apple store, most of the 100 people waiting in line for the iPhone 6 and iPhone 6 Plus were buyers and sellers, says USA Today. One group, according to the website, was planning to purchase 10 gold iPhones that they plan to sell in Dubai. Another group said to be from China had to be chastised by the police when they broke out into a fight.
In other countries such as Tokyo and Hong Kong, where the new iPhones became available on Friday, scalpers also abound, according to Reuters. The news agency names Justin Leung, a 28-year-old financial planner who paid his friends to fall in line at an Apple store and buy 35 units he can sell in mainland China, although his friends were only able to get 25 units. Another Chinese man who declined to identify himself is also said to have paid a group of Japanese to buy several iPhones for him in Japan's upscale Ometesando Boulevard. And in Singapore's Marina Bay business center, more than a dozen teenagers say they were paid to fall in line to buy iPhones for their boss.
"Our boss is paying us about $150 (US $120) per job," says 18-year-old Clarence Chen. "We are all buying two - one maybe for ourselves, the other to sell."
The teenager did not identify who his boss was but said that the extra iPhones will be sold to a dealer.
The scenes all paint a picture that isn't really new to Apple, as the iPhone maker has been forced to put in place a reservation system that is supposed to prevent individual scalpers from hoarding new iPhones and selling them for double the price. But filmmaker Casey Neistat of HBO's The Neistat Brothers paints an even grimmer picture, one where "the Chinese mafia" is reportedly behind the lines of elderly people sleeping in garbage bags in New York City's Upper West Side Apple store, with some getting in trouble with the police.
In a short documentary posted on YouTube, Neistat records the darker side of what used to be mostly a joyous ritual of sitting in line for the latest Apple product, presenting clips of buyers carrying bags of iPhones and immediately selling the new devices for cash. At around 4:16, the video shows a clip of Apple employees applauding in the background as the line of seemingly unexcited buyers walk into the store, which is uncharacteristic of earlier iPhone launches accompanied by lots of cheering, hooting and general excitement.
But while Neistat most likely cut off the brighter side of the picture, the video isn't unconvincing at all, given that China has been left behind in the iPhone 6 market. The country, which is Apple's second biggest source of revenue, will not be selling the new iPhones yet because Apple is still going through the regulatory hoops to sell its latest smartphone there. Until then, Apple fans in China who badly need to get their hands on the hotly anticipated devices will have to pay more, in one case as much as $3,250, for the iPhone 6 from the black market.
Neil Shah, director for devices at Mumbai-based Counterpoint Research, estimates that at least 5 million iPhone 6 and iPhone 6 Plus units will be smuggled into China, where many buyers are known for going to extremes to get the latest handset early. One man was said to have put his girlfriend up for rent so he could have the funds to buy the latest Apple phone.
Anyone who is caught selling the new iPhones in China will have to face sanctions for breaking two laws, namely using mobile phones not approved by the Chinese government and bypassing the import duties levied on products coming from out of the country.
Apple declined to comment on the practice, but one employee interviewed by Cult of Mac has this to say:
"Customers are customers."
