iPhone 6/Plus lust revives underground U.S. market, joining China’s thriving gray market

“The Craigslist ad is direct: ‘I’ve got what you’re looking for — 10 prime new-in-box iPhone 6 Plus!'” Tim Higgins and Edmond Lococo report for Bloomberg. “The price for the phone without a contract was for as little as $1,300, though bulk pricing may be possible, according to the ad posted this week by someone claiming to be in San Jose, California. That’s $451 more than a similarly equipped 64-gigabyte model sold by Apple Inc.”

“The ad is one of more than 1,000 on Craigslist for the iPhone 6 Plus in the San Francisco Bay Area. In New York, Chicago, and other cities across the U.S., hundreds of other ads also offered the latest big Apple phone, which went on sale on Sept. 19 in 10 countries and have since been in such high demand that the Cupertino, California-based company faces inventory challenges,” Higgins and Lococo report. “The ads show how the U.S. has joined China as a place where the secondary market for iPhones is alive and well. Yet while China’s gray market is thriving because the new iPhones aren’t available there — China wasn’t one of the countries to get the handsets last week — the U.S. secondary market is being driven by a lack of inventory, with people willing to pay up for convenience, said Carl Howe, an analyst with 451 Research LLC [Yankee Group]. Some U.S. buyers are also making purchases to resell the products later to Chinese acquirers, he said.”

“Those willing to sell their iPhones to China are set to find voracious demand. An estimated 500,000 units of the new iPhones have already been smuggled into China, Jun Zhang, an analyst at Rosenblatt Securities Inc., said in an e-mail,” Higgins and Lococo report. “As many as 5 million new iPhones may be smuggled into China before the new models are officially available, according to Neil Shah, Mumbai-based research director for devices at Counterpoint Technology Market Research.”

Read more in the full article here.


  1. On Monday at the NYC Soho Apple store, virtually everyone in line was Asian and buying iPhones with cash.
    The approval delay of Chinese iPhone seems curious.
    Were one cynical, the approval delay allowed Chinese entrepreneurs to make a profit of between $300,000,000 and $500,000,000 in less than a week.

  2. This is the first time in the history of the iPhone that the lines were overwhelmed by the scalpers. There was no way for Apple to predict this, thus no way to prevent it.

    There is no doubt that this made the whole waiting-in-line experience very unpleasant to those who did it, so I have no doubt Apple will do what is necessary to prevent this from happening again next year. There certainly is a simple and elegant way to eliminate motivation for those scalpers to wait in line for a device they are planning on reselling. Perhaps asking for a credit card and a valid ID, or limiting first week sales to only subsidised devices for domestic market, or some other method. I’m have no doubt Apple will find the correct answer, and I’m sure we’ve seen the last of scalpers overrunning iPhone lines at Apple stores.

    1. same thing actually happen two years ago with the 5.The people in the front of the line were Asian and they didn’t speak any English. So they may have been in front, but I and others got in before them because nobody could understand them. When I left the Soho store all of a sudden there was a translator with them .its a weird problem. Apple is still selling the product and its not their fault. next time China should have the same release date and this wouldn’t happen

    2. Hey Predrag I hope you are doing well. I’ll take issue with your statement “There was no way for Apple to predict this, thus no way to prevent it.” as an intellectual exercise.

      There was a simple way for Apple to predict it. Someone at the round table should have said: “Let’s release the iPhone in China first and delay the release in the United States.”

      In fact, I’d be willing to bet that if the iPhone 7 were to be released in China first several months before the American release there would be tons of Americans flying over there lining up to get the iPhone 7, bring it back and sell it at exorbitant prices.

      I highly doubt that it was premeditated. I suspect it was some bureaucratic holdup in China that made for this situation. Apple needs to realize that they are a global company and need to act globally think locally, which wasn’t done in this case.

      China is a huge economy and that’s where they make the iPhone.

      Anyway just something I’ve had on the back burner that I’d thought I’d share with you.

      Always a pleasure reading your posts sir, have a good one.

      1. I suppose you’re correct; someone might have expected this. It never happened before, though, which means someone would have had to guess that there would be such underground demand from China. Now they know what happens when China is delayed, and if it ever happens again that they can’t release China at the same time (for whatever bureaucratic reasons), at least they can figure out well in advance how to prevent scalpers.

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