iPhone 6/Plus smugglers flood China’s gray market forcing prices down

12 years ago

“Wholesalers who helped orchestrate the smuggling of tens of thousands of the phones into the country are now slashing prices to move inventory. At an electronics market in central Beijing, one retailer was recently selling the low-end iPhone 6 and 6 Plus for 6,500 renminbi to 8,800 renminbi ($1,060 to $1,436), down from 12,000 renminbi to 15,000 renminbi ($1,960 to $2,450) just after the release,” Paul Mozur and Shanshan Wang report for The New York Times. “‘Stocks of the iPhone 6 are way too high right now,’ said one wholesaler of smuggled iPhones in Beijing’s northwestern tech hub Zhongguancun.”

“When the prices were high, early last week, the wholesaler said he was making more than $163 per sale,” Mozur and Shanshan Wang report. “But his profit margins have dissolved as prices have fallen. ‘This year the scalpers’ losses will be big,’ he said.”

MacDailyNews Take: Good.

“The Chinese government is not making things any easier. An intensifying crackdown on corruption in the country has led officials, who in the past were known to spend big on luxury products like iPhones, to tamp down on lavish purchases,” Mozur and Shanshan Wang report. “Three government officials in Shanghai and Beijing said they had not heard about any formal notice to stop using foreign phones and said many in their departments still used iPhones. One of the officials in Beijing, however, said people in his office refrained from bringing in Apple computers or iPads, because they are a more conspicuous display of wealth.”

Full article here.