Hong Kong's Grey Market for iPhone 6

A new iPhone is a lot more than an ordinary smartphone, it's also an investment to some buyers. After reserving the limited offering of iPhone 6 online every morning, some customers resell it to other private users and shop owners in Mong Kok and Shenzhen to earn the price difference.

More than 10 million new iPhones were sold over the first three days after entering the market on September 19. But it is still soaring high after a month's sale.

At 8 sharp every morning, customers scramble to make online reservations for the limited offering of iPhone 6 or 6 Plus. At 8.04 am, the reservations are usually fully occupied.

"IReserve (iPhone online booking system) makes me feel frustrated," said Mr Mark Chan, a bank clerk who bought his iPhone 6 from Sincere Podium, a shopping mall that mainly sells mobile phones. "I like the new iPhone very much and I don't mind paying $400 more as I have to pay thousands of dollars for it."

It is not easy for normal customers to order an iPhone online and this situation stimulates the grey market.

Eason Tsang, a university student, is one of the skilled reservation makers surviving in the reselling market. "My friend started to resell iPhones on the first day of sale and he earned a lot, so I decided to join the reselling army," said Eason, who resold more than 20 new iPhones and earned $15,000 since then.

Each phone number or credential number used to reserve an iPhone can only buy two phones, so he uses personal information from his friends to make the online reservations. After picking up the phones in Apple store, he resells them to shop owners in Sincere Podium in Mong Kok according to the reference price in Hong Kong Golden Forum.

The price of iPhone has been fluctuating. In his biggest deal, Eason earned $2600 after selling a golden iPhone 6 on September 21. He once lost $500 when he bought and sold a Japanese iPhone 6 in the grey market.

But he said he cannot earn as much as the first few days now. " I would be satisfied to earn $200 for one iPhone 6 at the moment."

While part-time resellers like Eason can always make profits, shop owners of phones suffered from hundreds of thousands of loss during the first few days of sale.

"I lost $3000 per iPhone on 19 September", said Mr Lo Lau, the owner of G•World Mobile at Sincere Podium. "Under unclear circumstances on that day, the prices were raised so high that I could not sell phones out after I bought them with high prices."

He gave $300 to $500 more than official price to part-time resellers for iPhone 6 and $800 to $1000 for iPhone 6 Plus. Mr Lau said he always ask for $100 to $200 more when he sold them to customers.

He pointed out that part-time resellers selling iPhones directly to buyers for private use might be one of the reasons contributing to the fluctuating price. But resellers with large amount of iPhones sitting around Apple stores or the surroundings of the Podium were those who blew them the most. "They do not have to pay rents! So they can offer higher price to buy in and charge less to sell out," Mr Lau complained.

Since China officially launched the sale of iPhone only until October 17, mainland Apple fans were another main targets for scalpers.

Smugglers were eager to try different methods, including wearing more than one underpants to carry iPhones through the customs to Huaqiang North, which is a district known as a huge electronic components and mobile phones market in Shenzhen.

According to the from 54th announcement made by general administration of customs of China in 2010, people should pay 10 per cent of the price of cell phone as tax when they try to enter the country with phones.

People who bring too many iPhones to be taken as "for private use "with them, may face imprisonment and fines for tax evasion and smuggling. Shenzhen Customs have ferreted out thousands of new iPhones brought in illegally within a week.

Even though new iPhones were launched in China now, Mr Lau said the reselling market would not decay. "The Hong Kong version of iPhone 6 is slightly different from Chinese version and is cheaper. Demand in mainland is always larger than supply so there will still be people coming here to buy," Said Mr Lau.

By Kyle Sun

Edited by Aska Cheong