China Gains Headway in Curtailing Apple Product Smuggling
Apple's incredible success has produced side industries that convinced enterprising individuals to take a slice on the billons that the American tech giant has been raking since its renaissance in mid-2000.
In China, where every iPad and iPhone that hit the global market were being assembled, local buyers unable to access the hit gadgets turn to the black market that satisfies their hunger, which do not come cheap.
Chinese consumers eager to lay their hands on new Apple releases were more than willing to plunk down double the amount of iPad's normal retail price just so to enjoy the bragging rights of owning the new tablet first, Reuters said.
In the case of the new iPad edition, customers from Shanghai and Shenzhen get their fix from smugglers, who sourced the devices either from San Franciso in the United States or from nearby Hong Kong.
The most basic iPad sells from $600 to more than $1000, unidentified underground sellers confided to Reuters, giving them good business and enough reasons to weave out elaborate scheme that would circumvent efforts by Chinese authorities to curb the rampant smuggling activities.
According to Reuters, Financiers or 'huangniu', also known in China as yellow-bull black-market operator, hire so-called 'nurses' that would be paid average of $30 to line-up during Apple product releases and snap up at most two units of iPad or iPhone.
Apple retail stores limit each buyer to only two units of the company's high-end products as a way to discourage the flourishing of black markets for its bestselling gadgets.
Previous Apple launches have afforded lucrative opportunities to black market sellers but stricter measures imposed by Chinese custom authorities have started making dents on the illegal activities.
Chinese travellers entering cities that were deemed as the likely market for the smuggled iPads and iPhones now face higher import due for any electronic products, with custom agents instructed to pay special attention to persons carrying Apple's undoubtedly desirable products.
Also, custom officials have issued advisory on U.S.-based shipping companies not to processes deliveries of Apple products into China, further closing another channel that before was used by black marketers to funnel hundreds of iPad and iPhone into the country.
The ploy, Reuters said, started paying off for the new iPad release thanks in large part to Apple's vast supply network that introduced the products to various markets across the globe almost simultaneously.
"Apple has gotten so big that they can flood the market. Before they released it, they probably had been making them for six months and had them sitting in a warehouse. Now they are selling it in Asia and Australia, and it's out 16 hours before us," one California international dealer was quoted as saying by Reuters.
And his counterparts in China has conceded that the tech giant has pretty much stifled what once was the steady flow of Apple products that moneyed buyers in China were only willing to purchase at almost any cost.
"There's an overabundance of supply. The market's flooded," the same source told Reuters, adding that "This whole game is over."