Where to buy an iPhone 5? You can purchase it from an Apple Retail Store, the Apple Online Store, or your carrier’s store. However, if you can’t wait till Friday, the 21st of September, well, if you are in Hong Kong, you can visit the local grey market to get the iPhone 5 first if you don’t mind paying a hefty premium on it. How much? US$1135 for an unlocked 16GB, and that’s a markup of nearly 40 per cent. More details after the break.
Apparently, Apple’s iPhone 5 has just gone on sale in Hong Kong’s grey market before Friday comes, but the phone comes with a hefty price tag. What’s the selling price? Well, it’s insane. See below for the price tags.
iPhone 5 (Grey Market Price, unlocked)
16GB: HKD$8,800 (US$1,135)
32GB: HKD$9,800 (US$1,264)
64GB: HKD$10,800 (US$1,393)
iPhone 5 (Apple Official Price, unlocked)
16GB: HK$ 5,588 (US$721)
32GB: HKD$6,388 (US$824)
64GB: HKD$7,188 (US$927)
Alright, Mr Lo, the ‘master’ of the grey market in Hong Kong who distributed hundreds to thousands of iPhone 4s and iPads to China’s gray market, told the local media that he is selling the iPhone 5 starting at HK$8,800 (about US$1135). When Lo was asked about the sales of the iPhone 5, whether there would be a demand for it, he said the stock for the iPhone 5 is quite tight, so he thinks it will be alright to re-sell the phone for a hefty markup, at least for the first two weeks. What’s more, he has prepared “secret” couriers in U.S. and Europe to hop on planes to Hong Kong after securing about hundreds of iPhone 5s. Right now Lo has already received 100-200 orders from mainland China customers before the iPhone 5 goes on sale in Hong Kong’s Apple retail store. He added that the grey-market iPhone 5 would not be limited in warranty and could come with an international guarantee, meaning owners could go into any Apple shop and have the device checked or replaced if required.
Here’s what a customer from mainland China told us when we asked him why he would want to purchase the iPhone 5 from Mr Lo,
“It’s frustrating that we don’t get the iPhone 5 immediately in China, and I don’t mind paying more to get the phones first because I think they are such a must-have gadget.”
Next, Mr Lo is also buying sealed iPhone 5s from customers by offering an additional HK$1,500 – 2,000 (US$193 – 258) for every capacity of iPhone 5. This drove many scalpers and the ones who just wish to make some easy money to pre-order the iPhone 5 from Apple and sell to Mr Lo. The Apple store is offering a 16GB iPhone 5 for HK$ 5,588 (US$721), HK$6,388 (US$824) for 32GB, and HK$7,188 (US$927) for a 64GB. So, you sit in front of your computer screen to pre-order the iPhone 5 online, get two iPhone 5s (each customer is only allowed to purchase 2), and resell them to the grey market, you will earn at least HK$3,000 (US$387). Brilliant.
Just in case you haven’t heard of the inside story of how the grey market works in Hong Kong, let us explain to you the things you must know. The grey market in Hong Kong is actually full of iPhones and iPads. The demand is undoubtedly so horrifically huge that a real Apple user cannot buy it from Apple’s online store, the Apple retail store, or Apple premium resellers. Apple has introduced a “lottery” system on its Hong Kong online store for people to reserve their iPhone online and pick up on the following day. However, there are always scalpers sitting in front of their screen and pressing “F5″ or using an automated booking program until a shipment is available, and then it will only take 10 minutes until they’re sold out. There are also many gangs of people queueing around the IFC Apple retail store, waiting for the phone’s availability to be announced.
So, why are people so willing to do this tedious work for an iPhone? The fact is, after you buy 2 iPhone 4 16GB unlocked for HK$9,976 (official price in 2010, about US$1,287), you can sell them to grey market buyers (including Mr Lo) for around HK$13,000 (about US$1,677). Later, the marked up price for one 16GB iPhone 4 in the grey market was around HK$6,000 (about US$774), which is around HK$1,000 (about US$130) more than the official price.
Actually, the limitless demand is from China; It is actually cheaper to buy Apple products in Hong Kong, concerning the exchange rate. Apple knows that people in Mainland China come to Hong Kong to do shopping because they do not need to pay any consumption tax when they purchase electronic goods in the Hong Kong. As the Renminbi gradually rises in value against the US dollar, the Hong Kong dollar, which is pegged to its American namesake, will inevitably decrease in value against the Yuan, enabling Chinese mainland people to buy more goods in Hong Kong for the same amount of money. For example, Apple’s new iPod touch starts from HK$2,288 (US$295) in Hong Kong, however, the product costs more in China where it starts from RMB 2,298 (US$362).
The conclusion? We have seen mainland Chinese willing to pay even double the official price to get the new iPhone 4S last year, and this is the type of customer the grey market is earning big profits from. It will be the same for the iPhone 5.
Source: ePrice (Chinese Translated)
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