By Chris Chang, posted Sep 30, 2010 at 11:43 AM, 41,662 views,

Beijing Apple Store Closed Due To Scalpers Reselling iPhone 4

Wait in line and buy an iPhone 4 seems to be impossible when Apple bumped up the sales limit on iPhone 4 from two to unlimited in Beijing’s flagship store today (September 29th). The rule of limiting sales to two per customer is removed and this draw a big crowd of Chinese customers to line up early in the morning. However, these people are not buying it for themselves, they are here to buy the iPhone 4 in large quantities and resell it at a high price to those who are anxious to get an iPhone 4. The Apple store suddenly closes its doors around noon… Updated.

This is crazy. The store opened at 7am. After 3 hours, people got stopped for queuing up and a piece of notice was put up on the front doors, saying “Temporarily closed”. No one could enter and there’s only a few customers walking out with 20-30 boxes of iPhone 4. These “customers” then lurked outside the store ready to pounce on any passers-by who is checking out for iPhone 4. “Want to buy an iPhone 4?” they say. “We have a lot. Come with us.”

Several people gathered around the counter in the Apple store, this caused a big mess.

People were pushed into the cashier’s counter, and some of them were showing their stacks of bank notes…

Employees were busy sorting out boxes of iPhone 4…

The iPhone 4 scalpers carried Apple shopping bags after purchasing the phones from the store. The whole place looked like a market.

According to sources, the real customers and the iPhone 4 scalpers had a fight in the Apple store. A gang of scalpers were cutting the queue and some customers were fed up with the scalpers for buying large quantities of iPhone 4 and resell them right outside the store. The police and Apple’s own security staff appeared to clean up the mess and due to the chaotic crowd, the store needs to be closed temporarily…

Apple employees were gone and the store was packed with security staff.

Even though the store got cleared, the iPhone 4 scalpers were still hanging around outside the store. Some of them were paid on average 100 yuan by local grey market that wanted many iPhone 4s. So, they decided to wait for the store to re-open.

The guys circled in red are the iPhone 4 scalpers. They worked in groups and they need to purchase a certain amount of iPhone 4s from the store before leaving the area. Then, if anyone ask them for one, they will lead the customer to an empty stairway in the same mall, where their members keep stacks of iPhone 4s in original packaging. If you’re worried about the authenticity of the product, or warranties, the scalpers will offer to take you into the Apple Store where, according to them, you can claim someone gave you the iPhone as a gift and request an official Apple Store receipt.

The above pic was taken from the newly-opened Apple store in Beijing. This store remained open but every customer is only allowed to purchase one iPhone 4. Since there are only two Apple stores in Beijing selling contract-free iPhone 4, people will head to this store if the iPhone 4 gets sold out at the flagship store.

For those customers who are really buying the iPhone 4 for themselves but did not want to stand in line, they could only purchase from the iPhone 4 scalpers. While the contract-free iPhone 4 is priced at 4,999 yuan ($747), the scalpers are selling it for 5,500 yuan ($822). Although it seems ridiculous to buy the iPhone 4 from these scalpers outside the Apple store, people have no other choice since it’s the only way left to get a contract-free iPhone 4. China Unicom does not provide contract-free iPhone 4.

Thanks to the security staff who cleared the store of both customers and employees.

Before Apple’s flagship store in Beijing removed the rule of limiting sales to two per customer, the scalpers were using a cunning way to buy more than two iPhone 4s. An iPhone 4 scalper Mr Huang told us:

I have been lining up repeatedly since the first day of launch. I purchased twenty iPhone 4s in total so far, sold 6 of them to the grey/black market dealers. For the remaining units, I have sold them to the consumers. Throughout the buy and resell process, I have earned 3,400 yuan. It’s quite tiring to wait in line at the Apple store everyday, and I even camped outside the store for overnight stay. Due to the recent cold weather here, I think I’m quitting this whole thing soon.

When Mr Huang was asked about whether Apple is aware of his repeat of queuing up for the iPhone 4, he said:

Nah, they could not stop us. Although they limited the sales to two per customer, but this rule is useless on us.

Since the Chinese citizens do not wish to sign a two-year contract when buying an iPhone 4 (they have their own phone numbers already), the local Apple retail store is the only place for them to get one. There are only 4 Apple stores in China now, two at Beijing and two at Shanghai. For Chinese citizens who are from other provinces of China, they need to travel to Beijing or Shanghai to purchase a contract-free iPhone 4, but since the iPhone 4 stock is ‘extremely limited’ now, only few could successfully own one. You may ask why they do not order it from the Apple online store, well, there’s no online purchasing on China’s Apple site. They could try the Hong Kong Apple online store, but they want their iPhones to have warranty in China, not Hong Kong.

So, if you asking how Apple will handle this crazy trading, they are now thinking a solution to stop these iPhone 4 scalpers. As far as we know, the Apple stores in Beijing and Shanghai will close temporarily when iPhone 4 scalpers visit the store…

Source: MacSir, Fawan

UPDATE: All four Apple retail stores in China now require customer to show his/her identity card while purchasing the iPhone 4. Every customer could only purchase one iPhone 4. Apple employees will unbox the iPhone 4 for customers and activate the phone right away. So, the iPhone 4 scalpers could not resell the iPhone 4 as “brand new” and buy in large quantities.