The end of iPhone cowboys could double sales in China

“You’ll never hear it from Apple, but ever since the first iPhone was launched, there has been a thriving, extremely lucrative black market in China and Hong Kong for the latest iPhones,” John Paul Fowler writes for The Motley Fool. “Oddly enough, the players in this back-alley world range from well-heeled and opportunistic Westerners to the poorest Chinese locals looking to get their first real taste of American entrepreneurship with a Chinese twist. It’s a world where black-market iPhone prices are updated daily in a manner eerily reminiscent of Wall Street in the 1920s. It’s a world where consumers pay twice the retail price right after an iPhone debuts. With profit margins so high, it’s not hard to understand why this back-alley business has flourished for so long but this world is about to come to a violent halt with the latest iPhone 5.”

Now, some will say they’ve been to China numerous times or maybe even lived there for years and never heard or saw anything of this nature,” Fowler writes. “Well, unless you live and operate among the locals in the backstreets of places like Chongqing, China (a rapidly growing megacity of more than 30 million people) you won’t see this black market (Most visitors’ exposure to China is limited to highly Westernized cities such as Shanghai and Beijing.) As for those who would assume that Apple would attempt to stop this thriving black market that just isn’t the case.”

Fowler writes, “With the iPhone 5’s latest technology the iPhone cowboys’ days are numbered. Apple now has the ability to negotiate a far better distribution network with Chinese telecoms, penetrate China as a whole, and operate with a worldwide product launch schedule that will finally prevent iPhone black-market arbitrage… A documentary that focused on Miami during the 1970-80s, spawned the popular term ‘cocaine cowboys,’ which referred to those who transported illegal drugs. Today, there are the ‘iPhone cowboys’ who smuggle iPhones into Mainland China and Hong Kong. These are self-proclaimed entrepreneurs and/or ‘mules’ (people hired to transport illicit products) alike who often smuggle anywhere from 10 to as many as 50 brand-new iPhones per trip (perhaps even more) right after a product launch.”

Much more in the full article here.

15 Comments

  1. I was in Guangzhou in march this year and I was offered an iPhone 4S for just au$100. But something tells me he was a pick pocket. I wish I bought it now. I only had an iPhone 4 at the time. I now have a 5

      1. His kind of thinking is what keeps theft sales up, except he said he didn’t buy it. If some fool is willing to pay outrageous amounts to get a product, then they’re not going to be stopped. It’s just the fact that ‘ordinary’ people get kicked further back in line in getting the product. Like companies paying shills to stand in line for concert tickets, then ripping buyers off for inflated prices.

    1. I was in Naples and bought a black market “iPhone 4S” for $50. Woe is me. It was a bait and switch. I tested the phone, inspected it. Worked perfectly. Seller put it in a snap case. Handed it to me, I paid him and quickly walked away feeling guilty. A block or so away, I struggled to unsnap the case. Finally, ripped the snap off and pulled out my “iPhone” , which was a piece of corrugated cardboard sandwiched between two pieces of metal shaped like an iPhone. I was p*ssed but had a good laugh. After all, the crook was asking $500 to start with. Guess, you get what you pay for. Oh, the wonders of Italy.

  2. Gretel McAlbertson: Why are you stealing food?
    Ratso Rizzo: I was just, uh, noticing that you’re out of salami. I think you oughtta have somebody go over to the delicatessen, you know, bring some more back.
    Gretel McAlbertson: Gee, well, you know, it’s free. You don’t have to steal it.
    Ratso Rizzo: Well, if it’s free, then I ain’t stealin’.

  3. sale double? it’s laughable because iphone is only share less than 2% in China. the main reason is that it’s too expensive. people are smart. they don’t just buy piece of shit. however, android smartphone is dominating up to 88%. I don’t know where its article came from. but it’s not true.

    1. But Apple is making far more money than the remainder combined. What’s the point of market share if the Android phone vendors aren’t making money? China is Apple’s #2 market after the US and the growth is actually accelerating. But I know that you’re in denial and just trolling here for the sake of it, so carry on if you enjoy wasting your time and getting laughed at.

    2. Too expensive for most people in China? OK. But piece of shit? Since it so clearly is not it merely reveals your silly bias. you may not consider it to be the best choice, and you may be right, but it’s still a really nice smartphone. Calling it a piece of shit indicates you don’t really have enough confidence in your own choice and so you feel the need to belittle the alternative.

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