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Scalpers capitalize on Apple's limited iPhone 4 stock in China

post #1 of 33
Thread Starter 
When the iPhone 4 went on sale in China last week, scalpers immediately began taking advantage of Apple's limited stock, offering the device to customers with a 10 percent markup and apparently causing a fight with regular customers at one store.

With the handset completely sold out in the four Apple retail stores in China, scalpers were waiting outside the locations, according to The Wall Street Journal, to offer an alternative. Those scalpers purchased many of the smartphones when they went on sale earlier in the week.

"Want to buy an iPhone 4?" the scalpers have reportedly been asking customers. "Come with us."

"Working in groups, the scalpers lead willing customers to an empty stairway in the same mall, where their cohorts keep stacks of iPhone 4s in the original packaging," the report said. "One scalper was offering the 16-gigabyte version of the device for 5,400 yuan, or about 795 dollars, a 10-percent mark-up over the sticker price."

The scalpers' handsets are said to be selling at a brisk pace, too, with one person revealing they had sold 10 handsets in just an hour. At least five groups were said to be working inside Beijing's Sanlitun Village mall.

The issue caused a scuffle with customers this week, according to MIC Gadget. Large crowds reportedly resulted in people being pushed into the cashiers' counter, and scalpers walked out with large bags full of iPhone 4s.

"According to sources, the real customers and the iPhone 4 scalpers had a fight in the Apple store," the report said. "A gang of scalpers were cutting the queue and some customers were fed up with the scalpers for buying large quantities of iPhone 4 and resell them outside the store. The police and Apples own security staff appeared to clean up the mess and due to the chaotic crowd, the store needs to be closed temporarily..."

The iPhone 4 went on sale in China on Saturday, drawing huge crowds of thousands of people, lined up to get their hands on Apple's latest smartphone. Carrier China Unicom received more than 200,000 preorders, and struggled to meet consumer demand.

A total of 100,000 handsets were said to have been sold in the first four days of availability, while the other 100,000 who preordered may have to wait until as late as the end of October to have their order fulfilled. Just 40,000 units were shipped for the first day of sales.
post #2 of 33
That's crazy...

I think Apple seriously underestimated iPhone 4's demands in China. I'm a little puzzled as to why China Unicom took in 200K preorders when they only have 100K in stock?

Can't they just walk across the street to Foxconn and get some more?
post #3 of 33
10 handsets an hour dosnt seem very fast..
post #4 of 33
Hopefully this eases the demand at the Apple Stores in Canada. People are still lining up very early in the morning, everyday, without even knowing if the store received stock. They sell out quickly any day they do get stock. One of the reason is that they sell them unlocked and people from everywhere (not just China, but many places) are buying up units to sell abroad. I think they still have a 2 per customer limit, but there are reports of people lining up, buying two and then handing them over to a couple people waiting outside the store. One person I know watched about a dozen people hand over phones to one guy, get a handful of cash in exchange and then walk away.

Even if it is difficult to get one in China, the fact that they are available, even through scalpers, has got to be easy and cheaper than importing them from Canada.

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post #5 of 33
Quote:
Originally Posted by Joe hs View Post

10 handsets an hour dosnt seem very fast..

I don't know. I wouldn't mind a job where I make over $700 an hour.
post #6 of 33
When folks having waited hours in line to buy their iP4 get shoehorned by jerks ahead of them or that cut in line to buy loads of iP4 phones and deplete stock to then turn around and scalp them to those same customers is just plain wrong. Sorry... I'm for capitalism and entrepreneurship but this is just sleazy.

Doesn't Apple in China disallow folks from buying a load of phones at the same time? It won't deter scalpers I suppose when they have a group of people waiting in line, each buying their max allotment.

So sad.
post #7 of 33
Buyers Send iPhones on a Long Relay to China
By NICK BILTON
Published: September 22, 2010

They show up in the early-morning hours: Chinese men and women, waiting silently and somewhat nervously outside of Apple stores in New York. On some days the lines they form can be a block long.



A store in Chinatown offers to buy and unlock the iPhone 4.




Customers in line to buy phones at an Apple store in SoHo. Some of the phones will be resold to end up on the streets of China.


These are not typical Apple fans. Instead they are participants in a complex and curious trade driven by China’s demand for Apple’s fashionable gadgets — products that are made in China in the first place and exported, only to make the long trip back.



http://www.nytimes.com/2010/09/23/te.../23iphone.html

In case you guys miss the NYTs coverage a few days ago...
post #8 of 33
This is a result of Apple not putting a limit on the number of iPhones that could be purchased at one time, right?
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post #9 of 33
Quote:
Originally Posted by solipsism View Post

This is a result of Apple not putting a limit on the number of iPhones that could be purchased at one time, right?

here the limit is 2 per. But it hasn't helped as the stock sent to stores is paltry.
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post #10 of 33
this is more a result of the sticker price being too low--people are still paying the price, but they're doing so in time, which is just a waste.
post #11 of 33
Quote:
Originally Posted by solipsism View Post

This is a result of Apple not putting a limit on the number of iPhones that could be purchased at one time, right?

Even a limit of one is easily overcome I'd have thought. The scalper simply hires a load of people to all by one and they still get a boat load. Still I'd rather be reading this than a news feed saying they were "Selling like Zunes"
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post #12 of 33
The other operator here in Helsinki just started offering iPhones. Unlocked, 478 without tax, and as many as you want to buy. There were some seriously long lines. Going to be interesting to see how the other operator responds.
post #13 of 33
Quote:
Originally Posted by caliminius View Post

I don't know. I wouldn't mind a job where I make over $700 an hour.

Come back a lawyer
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post #14 of 33
'Large crows', thinking that must be a typo.
post #15 of 33
Not liking the fact that they cut the line and constrain supply, but 10% is less than EBay charges in some cases.

The 2 phone limit is probably a good thing.
post #16 of 33
MacRumors is reporting that all four stores in china are now requiring ID, limiting 1 per customer and requiring every phone to be opened and activated on the spot.

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post #17 of 33
Quote:
Originally Posted by Tulkas View Post

MacRumors is reporting that all four stores in china are now requiring ID, limiting 1 per customer and requiring every phone to be opened and activated on the spot.

Sounds like the smart way to sell them, to avoid scalpers, when supply can't meet demand.
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post #18 of 33
Quote:
Originally Posted by AppleInsider View Post

Large crows reportedly resulted in people being pushed into the cashiers' counter,

Wow! That IS scary! Crows can be so nasty and aggressive!
post #19 of 33
Quote:
Originally Posted by canucklehead View Post

Wow! That IS scary! Crows can be so nasty and aggressive!

missed that one... roflmao
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post #20 of 33
Quote:
Originally Posted by rbonner View Post

'Large crows', thinking that must be a typo.

Yes, but a high-quality Graham-Greene-ish sort of typo. And apt - crows being opportunists and scavengers.
post #21 of 33
Quote:
Originally Posted by Joe hs View Post

10 handsets an hour dosnt seem very fast..

Ahh, but you are forgetting something:

"with one person revealing they had sold 10 handsets in just an hour"

ONE PERSON said this...with a 10% markup of $700, thats $700 profit, in one hour.

$700 an hour is a pretty good wage. Noted it said they work in groups, but still how big could those groups be? If its 10 people then they get $70 an hour each, still a pretty good wage. Especially in China.
post #22 of 33
Quote:
Originally Posted by Realistic View Post

Sounds like the smart way to sell them, to avoid scalpers, when supply can't meet demand.

Yeah if only Apple had ever thought about doing it that way!
post #23 of 33
Quote:
Originally Posted by Gxcad View Post

Ahh, but you are forgetting something:

"with one person revealing they had sold 10 handsets in just an hour"

ONE PERSON said this...with a 10% markup of $700, thats $700 profit, in one hour.

$700 an hour is a pretty good wage. Noted it said they work in groups, but still how big could those groups be? If its 10 people then they get $70 an hour each, still a pretty good wage. Especially in China.

Pretty good?

This is not skilled work. Anyone can be bought for probably $10 an hour (unemployed) to do this task. $70 an hour works out to $140,000 a year roughly. In the USA that would put you in the top 1%. What percentile do you think it puts you into in China where 500 million people earn below 10K per year?
post #24 of 33
glad to see that americans aren't the only idiots in the world...
post #25 of 33
Chinese in China and around the world put American capitalism to shame. Come to Asia. You'll see what making a buck is all about... At least Gordon Gekko wears nice suits and collects art.

I suppose Africa is more dicey, since instead of just Blackberries they also use semi-automatics.
post #26 of 33
Quote:
Originally Posted by screamingfist;

glad to see that americans aren't the only idiots in the world...

The Apple infection is a global pandemic.
post #27 of 33
Quote:
Originally Posted by Tulkas;

MacRumors is reporting that all four stores in china are now requiring ID, limiting 1 per customer and requiring every phone to be opened and activated on the spot.

Welcome Apple to retail in Asia.
post #28 of 33
Quote:
Originally Posted by Joe hs;

10 handsets an hour dosnt seem very fast..

That's just one guy...!

All your capitalism are belong to Chinese
post #29 of 33
The sad thing is that if Apple truly loved their customers like Steve Jobs was boasting about during his antenna keynote, all of this nonsense could be stopped in a heartbeat. Don't sell unlocked phones in your retail stores, only sell them online, one per person, simple as that. You want your unlocked phone, order it, get it in the mail. You can only pay with cash? Pay for it in the store, get it in the mail. This way, those who truly value the product and want it for themselves can rest assured that those in line with them are all waiting for the same thing. The argument that they wouldn't sell as much doesn't stand up. It's in such demand, they would still sell all their stock that comes in. Think of how many hundreds if not thousands of people that walk into Apple stores every day asking for an iPhone only to be told they don't have any week after week. That's a lot of lost sales to potentially new or sitting on the fence casual walk in customers. The supply is just not there, and scalpers sure as hell don't help the situation.
post #30 of 33
LoL, so what happened? These guys walked in on opening day, bought like 100 phones, which the shop assistant promptly handed to them, they walk out the front door and start selling them at a 10% markup? Sounds like Apple should raise their prices.
post #31 of 33
Ah, 100K units within 4 days, that's with scalpers. I see.
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post #32 of 33
The scalper issue in the store seems like an inside job since it's unusual for an Apple retail store to remove the purchase limit of 2 iPhone per customer to be unlimited. Who ever made that decision most likely is suspended or fired since it caused a riot in the store which involved police.
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post #33 of 33
The story, which NYT tells, calls AT&T's pricing error.

$199 (iPhone 4 16GB) + $70 (1 month payment) + $325 (ETF) - $10 (1 month of usage)
= $584

Which is considerably less than $700 for unlocked iPhone 4.

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