The Chinese government has just approved the sale of Apple's iPhone 6 and iPhone 6 Plus in China, which means party's over for the Chinese smugglers who showed up in droves at Apple's retail stores across North America on Sept. 19. The boxes and bags of iPhone 6 and iPhone 6 Plus units they were planning to sell for as much as three times the retail price are no longer as profitable as they expected they would be.
Apple announced on Tuesday that it will begin selling its new pair of iPhones in the Chinese market on Oct. 10 from the Apple online store and on Oct. 14 from Apple's retail stores in China. This comes after Apple received its license from the Ministry of Industry and Information Technology (MIIT) to sell the iPhone 6 and iPhone 6 Plus for use on China's state-owned mobile network. The phones will be available from all three major mobile carriers, namely China Mobile, China Telecom and China Unicom.
"We are thrilled to bring iPhone 6 and iPhone 6 Plus to our customers in China on all three carriers at launch," says Apple CEO Tim Cook in a statement.
Not so thrilled, however, are the Chinese smugglers who were banking on China's late approval of the iPhone 6 to make a profit. On Sept. 9, the new iPhones debuted in several countries, including the United States, United Kingdom, Australia, Japan, Germany, France and Canada. On the other hand, China, which accounted for 15.9 percent of Apple's profits last year, did not see the iPhone 6 fly off the shelves in Apple's Chinese stores because Apple was still going through regulatory hurdles to acquire a license for the new phones.
These hurdles involve what the MIIT calls "rigorous security testing" and multiple discussions between government and Apple officials regarding the security of the new phones. Chinese government has become increasingly wary of American technology companies for their alleged involvement in the National Security Agency's mass surveillance program leaked by Edward Snowden last year. China, in particular, has exchanged spats with a number of companies including Microsoft and Google over issues about user privacy and security, which is why it has taken its time to review the security measures on the iPhone 6.
But demand for the iPhone 6 has already plummeted, according to the New York Times, which may be partly due to reports of an imminent approval by the state to let Apple sell the new phones. One seller of smuggled phones in Zhongguancun, a tech hub commonly called China's Silicon Valley, laments: "Stocks of the iPhone 6 are way too high right now." Previous prices for his smuggled goods were at $1,960 for a 16GB iPhone 6 and as much as $2,450 for a 16GB iPhone 6 Plus. Now, the prices have dropped to $1,060 and $1,436.
"This year the scalpers' losses will be big," the man said.
The governments of China and Hong Kong, from which the contraband phones are smuggled across the border into Guangdong province, have also intensified the crackdown on smuggled iPhones. On Saturday, Hong Kong authorities arrested a 31-year-old man who was attempting to smuggle 67 iPhone 6 and four iPhone 6 Plus units by car after foiling another operation involving 286 iPhones on Thursday. Officials at Shanghai's international airport also thwarted a suspected attempt to bring in 691 iPhones.
