Pre-ordering for the iPhone 4S got underway a few days ago in Hong Kong, and the process hasn’t been entirely smooth. Seriously, it was a messy one. First, Apple “quietly” pushed the pre-ordering from the traditional midnight to morning. Secondly, people were allowed to places TEN (10!!!) iPhone 4S on each order. Last but not least, REAL iPhone users are pissed that they cannot place an order for a 4S, thanks to those greedy resellers and gray market dealers.
Before you read on, we have to tell you that there are several reports out there saying the iPhone 4S pre-orders are sold out in 10 minutes in Hong Kong, THAT’S TOTALLY BULLSHIT. We are in Hong Kong, and every citizen here knows that the iPhone 4S pre-orders are sold out in 45-50 minutes. You may say, who cares how many minutes? Apple sold them. That’s all they care about. Well, you are wrong. The truth is, Apple’s iPhone 4S pre-order scheme in Hong Kong is like some terrible, labyrinthine nightmare. Below is the whole story.
We all know Apple has announced it will make its new iPhone 4S smartphone available in 15 additional countries on November 11, including Hong Kong, with preorders beginning in the majority of countries on November 4. Well, all people in Hong Kong were super excited when they saw the news on newspaper, websites and TV news. And most of them share their thoughts through local forums, saying that the 4S is finally coming soon to Hong Kong. Here’s what Fat Wei, a Hong Kong netizen, said in a thread,
“Hooray! iPhone 4S is going to be available soon! C’mon, all resellers! What’s your plan?”
Yeah, pre-order starts a week ahead of the launch day. People in Hong Kong can visit the Apple online store to place an order. The local media reported that the pre-ordering will start from midnight, since that’s what Apple always do. So, Hong Kongers were all ready, to place an order at midnight, but apparently, Apple did something different.
Before midnight, the Hong Kongers were all chatting on local forums, discussing the price, the availability and most importantly, the amount of iPhone 4S they will be purchasing from Apple online store. Below are some interesting threads that you must read,
“We are the primary ones to supply the iPhone 4S to mainlanders when the 4S is not officially available yet in mainland China. That’s why we are ordering as many as we could, and resell them to Sin Tat!”
“I will buy as long as it is in stock. And I will sell all of them to mainland China!”
“What’s the buy-in price at Sin Tat? How much can we earn for reselling one?”
“I want to ask how to order 100 units. Will Apple cut my order if I use 5 credit cards to order 10 units and ship them to a same address?”
“Forget the idea of scalping iPhone 4S. There’s a lot of stocks out there. Please look out.”
iPhone 4S (brand new sealed SIM-unlock) (Black/White)
16 GB: ~$6900
32 GB: ~$7400
“One could easily earn $500 per unit, and reselling it to the Sin Tat parallel traders is actually safer than bringing it to Shenzhen. Sin Tat is an interchange station, the parallel traders have their own ways to import the phones into Shenzhen. You need to know that the China customs could charge you tax if they found an iPhone on your body.”
Basically, everyone was discussing about the official prices for the 4S, and the buy-in price at Hong Kong’s most popular gray market, Sin Tat. Everyone was sitting in front of their computers, hitting the refresh key on their web browsers, waiting for Apple to update the online store for iPhone 4S pre-orders at 12am midnight. However, when the clock strikes twelve, nothing was found on Apple’s iPhone page. The store still sells the iPhone 4, and there’s no sight of iPhone 4S pre-ordering option. At that time, page load times were taking well over a minute, and everyone was pissed. Some of them kept on insisting to wait, and for those who need to go for work on the next morning, they went to bed at 1am. The next morning, it’s showtime.
At 8am in the morning, Apple’s “Store Down” page appeared. After 10-15 minutes, iPhone 4S pre-order button appeared. Perhaps the one thing that shocked everyone is that Apple has increased the former two per customer iPhone limit to TEN — and Apple listed a firm delivery date period for those ordering: November 22 — December 6. People who waited for the whole night were super excited, and they hit that blue color pre-order button right away. But things get nasty afterwards.
“Oops” error pages often appeared and buyers were reporting that they have spent over 10-20 minutes trying to order the 4S from the Hong Kong Apple Store. Apple was giving buyers problems, and some buyers were saying that they were stuck on an error page stating “an error has occurred during your session. Please return to the Store Menu to continue shopping”. Moreover, people were complaining that they have to refill the shipping address for multiple times when an error appeared during the checkout process. Perhaps the most ridiculous thing is that Apple sold through its initial stock of iPhone 4S units at its online store in Hong Kong in only 45 minutes. So, only the lucky ones could successfully place an order for the 4S in that time period, and for those unfortunate ones, they were extremely disappointed.
“Everyone could only wait, wait and wait. No one knows the launch time at all,” said San Gong-jiao, who missed the chance to pre-order it because he was on his way to work at the morning.
Dai, a Hong Konger who is living in Ireland is also very pissed. “I waited for five hours! It’s unbelievable, Hong Kong Apple pushed the pre-ordering from the traditional midnight to morning. What’s more, Hong Kong Apple increased the former two per customer iPhone limit to ten!!! While a customer could only get two in the European countries, there’s surely a private deal going on at the Hong Kong Apple store!”
It is definitely worth noting that the purchase “limit” was 10 phones per customer, not the 2 per customer that we see in many other countries. However, people who ordered 10 iPhone 4Ss got their orders cancelled by Apple a few days later, even though the payment is successful. Wong, a customer who purchased 10 units of 16GB iPhone 4S, told us that his orders were cancelled by Apple. Below is Wong’s order acknowledgement he received from Apple,
And Wong was told that his order has been cancelled…
There were some customers facing the same problem as Wong. Some of them ordered 2 phones, and their orders were cancelled too. For those who have spent the highest balance on their credit cards, they could not use the credit card to make further purchases at the Apple store, thus they are not able to purchase iPhone 4S from the Apple Store at IFC mall on launch day. People were boycotting Apple that everything was planned — allow customers to place ten iPhone 4S on each order, tell them the payment is successful, let them know order is cancelled after a few days, and force customer to use other credit cards if they want to purchase the 4S on launch day. Ming, a reseller who has been reselling iPhones and iPads to the city’s gray market, said,
“I have lots of credit cards! You want to play with me? C’mon! I’m bloody rich! Nothing could stop me to buy all the iPhones from you! I will surely buy as many of the 16GB iPhones as I could and sell them to the dealers at Sin Tat!”
The iPhone 4S pre-ordering was seriously messed up, and according to witnesses, there were people gathered at the Hong Kong Apple Store, complaining about the lack of announcement related to the launch time of pre-ordering for the iPhone 4S. Here’s what an Apple employee said to one of the troublemakers:
“There’s ten thousands of customers asking me about this today!
As we said, there were some lucky ones who managed to place an order for the 4S. One man, who needs to work overnight, successfully placed two orders of white iPhone 4S 64GB when the pre-order button appeared. He has a friend, who managed to order 30 iPhones, was planning to resell it to the gray market dealers for a fee of HK$1,000 each.
Reselling The iPhone 4S For Easy Profits
Everyone in Hong Kong knows one fact — China charges sales tax and Hong Kong doesn’t. That is why Hong Kong is the top travel destination (also top gray market for Apple gadgets) for mainland Chinese because the same item is cheaper in Hong Kong. For example, the iPhone 4 8GB model is priced at HK$ 4,288 in Hong Kong, while it is priced at RMB 4,088 in China. Purchasing the device in Hong Kong only costs RMB 3,498, that’s RMB 590 cheaper than purchasing it from China!
So, the unlocked iPhone is sold as cheapest rate in Hong Kong when comparing with all markets globally, thanks to its tax heaven with no sales tax. Importers and visitors from neighboring countries or regions such as mainland China, and India would snap up as many iPhone 4S as available in Hong Kong to resell at home market at mark up price on the gray market. For an iPhone 4S 16GB model (parallel imported), it has fetched as much as HK$ 10,800 in local computer malls during the first three days of U.S. launch. Ever since the iPhone 4 is introduced to the world, the trade has been joined by a large army of scalpers in Hong Kong who bought virtually every iPhone 4 available (until now) to sell at a premium to dealers or exporters who have link to overseas’ markets.
Next, parallel imports are very common in China and Hong Kong, and people import phones that aren’t available via official dealers such as the local carriers, the Apple store in the country, and sell them there all the time. Previously in China and Hong Kong, the iPhone 4S wasn’t officially out yet. But you can buy it in the gray market for HK$ 10,800 (about $1389), which is insane. It comes already unlocked, and able to use any of the local carriers (like China Mobile). Despite rampant rumors of a deal between Apple and China’s largest cellphone carrier, no one knows when the iPhone 4S is supposed to hit China officially. That’s why the iPhone 4S becomes a bona fide gray-market hit. Here’s one interesting info we got from a Chinese netizen. The iPhone 4S is readily available in computer superstores in most large Chinese cities. In Beijing’s Zhong Guancun, a 15-story mall filled with technology vendors, almost all the stalls are stocked. We sent one of our editors to ask several of these vendors whether they could sell him 100 iPhone 4Ss. They all answered “No problem.”
How do the vendors get the stocks? Well, most iPhones bound for the Chinese market are first illegally imported into Hong Kong. From there, workers carry them a short way across the border to Shenzhen (one person can bring in as many as a thousand a day). They are then shipped to all of China’s major cities such as Beijing and Shanghai.
For everyone else by far the biggest problem with the iPhone 4S is availability. Well, the iPhone 4S will be officially available for sale in Hong Kong on November 11. Hundreds to thousands of people had lined up on the footbridge outside the IFC mall in order to buy the new iPhone 4S, and police were even called to kick people out of the place. On the other side, Hong Kong’s leading mobile network operators will take pre-orders for the new Apple smartphone and start selling the handset at the stroke of midnight on November 11. Anyway, we hope the Hong Kong Apple store would not meet aggressive scalpers just like what we see from the Beijing Apple store.
Feel free to read the related stories we’ve covered:
p.s. Brian, you are definitely NOT keeping as close tabs on Apple’s prospects in China as us.
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