China's iPhone 6 delay gives scalpers reason to cheer

A sign in a Hong Kong shop showing the prices it is prepared to pay for new Apple iPhone 6 and 6 Plus models - from HK$10,000 to HK$20,000 (S$1,630 to S$3,260) - which are higher than the official retail prices.
A sign in a Hong Kong shop showing the prices it is prepared to pay for new Apple iPhone 6 and 6 Plus models - from HK$10,000 to HK$20,000 (S$1,630 to S$3,260) - which are higher than the official retail prices.PHOTO: REUTERS

It will cost Ms Yang Weiwei a lot more to buy the iPhone 6 in Hong Kong rather than wait until it is sold in the mainland, but the snob value of being among the first in China to own Apple's latest gadget is worth the extra 2,000 yuan (S$413) she will fork out.

The new phones go on sale in the United States and Asian cities such as Hong Kong and Singapore today. The delayed launch in China has led to Apple fans like Ms Yang, 28, going to great lengths to get their hands on the device.

"I expect to pay 7,000 yuan to have a friend in Hong Kong buy the phone for me, compared with about 5,000 yuan if I wait to get it here," she said. "But I'm curious about this new product and want to be the first to have it."

It is an ironic turn of events considering that the iPhones are made in China and yet are unavailable to Chinese customers. This perceived slight has led some angry fans to call for a boycott. But this delay has also turned into a business opportunity for some.

Media reports say Chinese scalpers are demanding, in some instances, more than 30,000 yuan for an iPhone 6, while buying trips to Hong Kong have been organised for die-hard Apple fans.

Although speculation has been rife, no one knows for sure what caused the iPhone 6 launch in China, originally scheduled for next Friday, to be delayed. Some cite supply chain issues, while others say Apple is punishing China for having leaked details of the phone before it was unveiled on Sept 9.

The most widely circulated reason, however, is that Apple has yet to secure a "network access" licence from Chinese regulators.

Xinhua news agency confirmed Apple has yet to obtain this licence in a statement yesterday, although it said the iPhone 6 has won two other regulatory approvals that have to do with product inspection and certification.

Earlier this week, the state- owned 21st Century Business Herald, citing a source close to Apple, reported that the company may have to wait until next year to get approval for new iPhones after failing to reach an agreement with the Ministry of Industry and Information Technology this month.

Given that China is one of Apple's most important and fastest-growing markets, this delay is likely to be a setback for the firm, already seeing its Chinese market share shrink amid intense competition from local brands Huawei, Lenovo and Xiaomi, experts say.

The firm reported sales of US$5.9 billion (S$7.5 billion) in Greater China from April to June, a 28 per cent increase from the same period a year earlier - and much higher than the 1 to 6 per cent growth in other regions.

With state media reports recently suggesting that iPhones could pose a risk to state secrets amid a cyber security spat between the US and China, the delay could further damage Apple's reputation among Chinese consumers, said Fudan University's Professor Doug Young in a blog post.

But Beijing-based Forrester Research analyst Gene Cao told The Straits Times that while Apple's revenue is likely to be impacted in the short run, its long-term prospects are still positive.

"For now, people might choose to buy the phone outside of China or switch to higher-end offerings from other brands. But in the long run, demand for Apple products will be healthy," he said.

IDC analyst Tay Xiaohan said the lack of availability of iPhone 6 might even help drive up demand.

"Apple is seen as a premium brand in China and owning an Apple product brings prestige and a certain level of status to Chinese consumers," she added. "This impression will not be easily affected or changed in the near future."

esthert@sph.com.sg