“Apple Inc., whose skill at hyping new products has helped make it the world’s most valuable technology company, became a victim of its own success with a botched introduction of its iPhone 4S in China,” Bloomberg reports.
“Would-be customers who had endured a wait overnight as temperatures dropped to below minus 9 degrees Celsius reacted with fury after the company’s main store in Beijing failed to open,” Bloomberg reports. “Apple had advertised that the store would open at 7 a.m. At about 7:15 a.m., people began chanting ‘Open the door!’ and ‘Liars!’ after a man with a bullhorn said the phone would not go on sale today, without giving an explanation. Police cordoned off the store after it was pelted with eggs from the crowd.”
Bloomberg reports, “Elsewhere in the capital, the introduction went more smoothly. At Apple’s store in the Xidan neighborhood, the company handed out 1,000 tickets good for the purchase of a maximum two iPhone 4S handsets. In Shanghai, a store in the Pudong district opened an hour early to accommodate the waiting crowds. Carolyn Wu, a Beijing-based Apple spokeswoman, didn’t immediately respond to telephone calls and e-mails.”
Read more in the full article here.
Chris Chang reports for M.I.C. Gadget, “Lines outside the Apple store in Beijing’s Sanlitun district show no signs of shortening, causing frustration for the thousands of fans and scalpers desperate to get their hands on the iPhone 4S.”
“Now some of that disappointment is turning to anger, with reports of fights breaking out between gangs of scalpers, and guess what, Beijing SWAT teams arrived,” Chang reports. “So, the Apple store employees later announced that the launch of iPhone 4S is cancelled at the Apple’s flagship store in Beijing, and all scalpers are pissed.”
Chang reports, “There are over thousands of people at the scene and seems like 99% of them are scalpers, according to local media reports. And according to our tipster, the scalpers are well organized, and they are divided into teams, just like military forces. Each team includes 30-50 scalpers. As the clock struck seven, Apple DID NOT open its doors, and a number of scalpers became frustrated. The scalpers began to shout words of ‘Open the door!’ while some were shouting profanities at Apple.”
Much more in the full article, with many photos, here.
MacDailyNews Take: The scalpers in China are out-of-control, literally.
These are not true Apple customers. These are crass opportunists looking to cash in on Apple’s success. On Day One product launches, true Apple customers don’t throw eggs and shout profanities. Much. Certainly SWAT teams have never been called in on real Apple customer line ups. No true Apple customers want hundreds or even thousands of scalpers in line ahead of them buying up the store’s entire supply on Day One, so they can’t get what they’re lined up for unless they pay jacked up the prices to the same scalpers.
Apple needs to get handle on this. This problem in China is getting worse with each new Apple product launch. Contact the scalper syndicates and deliver a certain number of pallets of product to them on launch day if they promise to stay away from the Apple Retail Stores for the first week or so of new product introductions. If that’s not doable (and it likely isn’t for myriad reasons), figure something else out. One iPhone per customer with on-site activation, as suggested by Tom O’Connell below. Figure out something, Apple obviously can’t run product launches in China the way they can in Wauwatosa.
Related articles:
Huge throng of red cap scalpers crushes Shanghai Apple Store for iPhone 4S launch (with photo) – January 12, 2012
Hong Kong scalpers buy up iPhone 4S and resell them for big profit outside Apple Store (with video) – November 12, 2011
Police, scalpers, and customers clash in iPhone 4S queues at Hong Kong Apple Store – November 10, 2011
iPad 2, white iPhone 4 sparks scuffle outside Beijing Apple Store – May 9, 2011
Apple takes steps to curb rampant iPhone 4 scalping in China – October 11, 2010
Apple shuts flagship Beijing store as scalpers sap store’s iPhone 4 supply – September 30, 2010
What, no bacon?
Phew!!!!
“Apple Inc., whose skill at hyping new products has helped make it the world’s most valuable technology company, ”
– And I stopped reading there, since Bloomberg had by now lost all credibility.
Really? Apple succeeds because Apple hypes it’s products?
*swear word goes here*
I agree, it’s only a few not he’s below the mainstream media using the term fanboi.
Anyone ever hear of a balut?
Don’t start the rtlifers going now…
Just the fact that there are “paramilitary” iPhone scalper gangs shows how big Apple will eventually become in China. The scalpers exist because they can buy an iPhone for regular price and sell it to someone else for much more. They can only do so, because supply does not meet demand.
Imagine the sales numbers when Apple CAN meet the demand directly, and put the scalpers “out of business.”
> There are over thousands of people at the scene and seems like 99% of them are scalpers
So it was a good move by Apple. By focusing on the other locations, Apple sold more iPhones directly to customers.
There’s nothing new about this.
When the iPhone 4 was released, by chance I walked past all the different Apple Stores in Manhattan (over a couple of days) and was surprised that well over half the people in line waiting for phones were Chinese.
These were block-long lines that didn’t thin out for days.
Later it was reported to be the same thing. People buying iPhones to ship back to China, presumably to jailbreak, since there was no provider there at the time .
But they don’t do it anymore for iPhone 4, because Apple is meeting demand with supply. And that’s my point.
Once Apple can meet demand with supply in China, and scalpers can no longer make a profit, imagine what those iPhone sales numbers will be… It will probably make current global sales look almost anemic.
It must be kind of hard to push and shove, all the time holding one arm up in the air holding a cell phone camera to record the mayhem. The awkwardness maybe served to reduce the intensity of the melee. It looked like they were tourists at their own riot.
Not really. It’s kinda like a rock concert – you get stuck in the crowd and can’t move anyway, so just go with the flow and hope you get out alive.
I’m wondering where the heck all those eggs came from in such a short time. If there was that much pushing and shoving, why didn’t they break in the protestors’ pockets?
There’s something deeper to this story.
Contact the scalper syndicates and deliver a certain number of pallets of product to them on launch day if they promise to stay away from the Apple Retail Stores for the first week or so of new product introductions.
That is quite possibly the worst idea I’ve ever read on this site. Mobs routinely shake down Japanese companies because they get away with it Once you start, you’ll never get rid of them.
-jcr
I concur..don’t recognize or legitimize the scalpers in any form. The one phone per customer would fix the problem.
That guy walking around those queues with his Samsung Galaxy SII might have had a lot of switchers. Sorry, but -9 degrees Celcius is just too cold to be waiting on line for a store that won’t open on time. I’d still buy the iPhone but it’ll just have to be weeks later after the thugs go away and the craziness stops.
Did the “customers” come preloaded with eggs in their pockets? Some back story to this episode is missing, I think.
Oh, come on. Everyone knows that egg sellers always accompany scalpers to big events in China. It’s a tradition that goes back 3,000 years!
Funny. I must have slept through that history lesson.
What came first, the Scalper or the Egg?.
This is one of the very few times I disagree with the MDN take. Dealing with scalpers is not a distribution method. Having enough on hand is. What, vouchers for 2,000 phones? WTH, in a country of 1.5 billion.
1.5 billion people in a country where the average annual income will only buy a few iPhones, and only those phones, no food, no nothing.
IPhones are bought by the urban well-to-do. Many can afford the scalpers’ markup. And that causes the problem.
Apple foments civil uprising in Communist China. Deadly world-shaking repercussions to follow.
(iPhone delayed a day) in small type.
Now that’s a headline that will go well with Apple earnings. It should send the share price plummeting on the thought of Apple getting America involved in (another war), I meant peace-keeping mission. You gotta hand it to Apple for always being in the headlines for all the negative reasons.
In your comment, change the word “Apple” with “scalpers”….
and in your screen name, change the word “Wise” with “RetardedAsshole”.
You are really screwed up, O Wise Investor. Of course, your twist on the event just follows the crowd. Isn’t is great how Bloomberg blames Apple for a “botched” introduction, as if they invited a thousand thug scalper minions. It is unbelievable how people warp reality to fit their own fantasies.
By the way, I haven’t sold a share of AAPL, despite your dire warnings. And I am not planning to for many years.
Agreed… truly “wise” people would see from the article that there is IMMENSE pent up demand for Apple products in China. Investors saying anything else are just trying to fool others and get a better price for Apple stock 😉
Problem is easy to fix. Sell phones only with activation to the person who buys it, one per customer.
Every rule can be sidestepped.
(Want proof? Just look at American banks & Wall St.)
that’s actually a good idea – require activation when sold for first week or so.
the problem is that it would significantly slow down the process, if every purchase required X minutes of activation. Still, good idea!
Didn’t Apple limit sales of the iPhone 3G to two per customer?
And didn’t they require a credit card to confirm I.D.?
And wasn’t it because of Chinese scalpers who were bypassing the non-availability of the iPhone 3G in China?
Of course! Because every Chinaman carries a chicken they had the eggs at the ready after standing in line all night. Never underestimate China…sirry American capitalists!
This is bad publicity for Apple. They overhyped the whole stuff way too much. This makes people think twice to go to a Apple store. I also dont like as these stores are often too crowdy to try out thing and get advice and i dont like waiting.
I also dont like these new product launches anymore because of that.
Btw i am a hudge apple fan and have a small apple store at home…
… and you were home schooled by your pet fish, apparently, given your hostile attack on appropriate english language found in your comment above…
You can always use the internet to order your products with Apple
btw: we know you are trolling this message board.. sorry for popping your bubble with that statement. Were you one of the declined scalpers? (lol!)
(no 100 yuan for you!) lol!
I would “hudge” a bet that you are no apple product owner.
So easy to spot, you trolls need to get more imaginative.
@MDN, seriously? Sell the Scalpers their own private reserve if they promise to stay out of line? That’s like selling guns to the mexican cartels if they promise not to shoot you with them. Dumbest idea ever.
Easier solution…send a message to the Chinese Government. For years around the world countries have been asking for Chinese Government to do more about scalpers and pirates. Should Apple open up the biggest cash cow for sales in the world to make more money if in the process it destroy’s their brand name and makes it worthless? I think not. Apple has survived just fine without China (for consumers that is…).
Apple should just pull iPhone 4s from China and tell the Chinese people until their government gets more control over illegal and immoral activity, their products won’t be sold there.
^ This message has been brought to you by Samsung 😉
Correctu,
I feel like I must have been home schooled by MY pet fish. Your comments on this thread R.O.C.K..
Thanks for pointing that out. I just took the tour of his comments and improved my quality of life a bit.
Like Google? Oh wait, they just went back in…
Ben,
Apple may be rich and to some extent powerful, but it is not a Country and it cannot dictate to the or one of the largest and most powerful Countries in the World.
They should have, with Chinese police told those in the queue that if it was not a personal purchase or did not meet their criteria they would receive NO GOODS. So go home or meet the criteria. Anyone pelting eggs or abusing Apple or its staff would be banned.
Google “Chinese Baby Soup” they eat fetus…. how sick
Because everything printed on the internet is 100% true.
The solution is simple: set up an online auction for the first week and Apple gets all the profits.
Scalper economics only work when there is scarcity. The solution is for Apple is simple: open several hundred stores in each city in China and stock each of these with tens of thousands of what ever item is being launched before launch day – problem solved!
One solution to this issue is to hold China’s launch dates until excess product is available – literally exceed demand. Then hand out tickets in the lines for 1 phone only. You can’t get rid of the scalpers, but you can make it harder for them to profit. Sadly, that probably won’t ever work in China, because 1) demand is too high and 2) the country is so large it can’t all be served by Apple stores, so I’m sure there will still be a gray market beyond Apple’s reach. Not to mention the danger of scalpers intimidating normal customers to leave the line, or of them robbing successful purchasers after they leave the store. And finally, there are enough poor people in the country that its worth a chance at making 100 dollars or more for standing in a line for 2 days to buy a phone for someone else.
The other solution is to make Apple’s most desirable (and therefore most potentially scarce or ‘gray’) products only available by internet (announced well ahead of time) in problematic Chinese locations.
It isn’t Apple’s fault. I doubt they hyped the release at all, knowing the volume of customers they’d likely see anyways. But Chinese culture isn’t like the West, and will require different handling.
Another solution, 50% mark up on the first day going down 10% each day. I don’t think the scalpers want to wait a week to buy.
An iPhone, which costs $650 (and that’s the US price; elsewhere in the world, it is more) is beyond reach for most Chinese (its price is higher than the average Chinese salary of around $500 per month). However, there apparently are plenty of affluent people who can afford it and who want it very much. When everyone who can afford it wants it on launch day, it is impossible to properly meet such demand. In the developed world, those who want it simply line up and wait their turn. In most of developing world, such lines don’t work all that well. In addition, because they don’t work all that well, those who really want it are reluctant to fight their way through the crowd. This generates the need for the scalpers, who provide a specific service and charge a fee for such service. Unfortunately, since such fee tends to be quite hefty, this line of work ends up attracting many opportunists. A launch day is just one day in a year, when everyone wants the device. It is just one day when an opportunity to make a quick buck exists. So everyone tries to take advantage of it.
There is nothing Apple can do to mitigate this. Opening many more stores, just so that on a launch day there would be enough doesn’t make any sense. Even having enough iPhones in stock won’t prevent crowds of scalpers. Forcing activation is also a no-go, since majority of those iPhones are sold unlocked, non-subsidised, which don’t require activation (that’s what scalpers are buying, since you HAVE to sign up for a carrier plan in order to get the $0 iPhone), and Apple is not in a position to require the buyer to purchase a carrier plan.
There is very little Apple can do to prevent this. Luckily, it will quickly pass, as the first wave of customers get their phones.
Clearly, Apple is missing an opportunity to sell eggs in China.
Ha. +1
win!!
egg-gate !!!
I found out a week ago that most young people (under, say, 25) don’t have any idea where the -gate suffix comes from. Had to explain Watergate. Interesting how a phrase can become so ubiquitous and yet its origins are lost.
Um, excuse me… What does God need with a starship?… I, I, mean…. Apple does not hype its products, the media does.