Delay in release of new iPhones in China gives rise to possible smuggling

A sign shows the prices of new Apple iPhone 6 and 6 Plus, higher than the official retail prices, next to dummies of the phones, at a mall selling smartphones in Hong Kong on Sept 12, 2014. The likely delayed launch of Apple Inc's new iPhone 6 i
A sign shows the prices of new Apple iPhone 6 and 6 Plus, higher than the official retail prices, next to dummies of the phones, at a mall selling smartphones in Hong Kong on Sept 12, 2014. The likely delayed launch of Apple Inc's new iPhone 6 in China, the world's biggest smartphone market, sparked a race to pre-order the phone in Hong Kong on Friday. -- PHOTO: REUTERS

HONG KONG (Reuters) - The likely delayed launch of Apple Inc's new iPhone 6 in China, the world's biggest smartphone market, sparked a race to pre-order the phone in Hong Kong on Friday.

Pre-orders for the iPhone 6 and iPhone 6 Plus sold out within two hours on Apple's Hong Kong website - and many of those devices will be smuggled across the border into China's mainland, where they could change hands for as much as four times the Hong Kong price.

The new models go on sale in the United States, Hong Kong and other markets on Sept 19, but China is still waiting for a release date.

Hong Kong residents went online to pre-order iPhones in the hope of selling them on for a tidy profit to unofficial dealers, many of whom will then move them into China to cash in on pent-up demand there.

Apple did not release the number of sales for pre-orders. "I'm worried about getting enough iPhones to resell. Orders have doubled compared to last year," said Mr Gary Yiu, a salesperson at I Generation in Sin Tat Plaza in Mong Kok, Hong Kong's electronics hub.

His store offers HK$10,000 (S$1,630) for those willing to resell the latest model, almost twice the official local price of HK$5,588. Mr Yiu said he has received more than 100 orders from Hong Kong and mainland China, double the number he had a year ago when Apple launched the iPhone 5S.

There are about 100 electronics dealers in Sin Tat Plaza and each bought 150 to 200 handsets immediately after the official release of the iPhone 5S last year.

In Shenzhen, across the Chinese border from Hong Kong, the asking price for the cheapest iPhone 6 model hit 20,000 yuan (S$4,120), while a salesman at a telecoms shop in Shanghai said his company had sent staff to Hong Kong, Japan and even the United States to buy the new models and get them back to China for sale.

"It's tough to say right now what price we'll ask. It really depends on market sentiment. It'll be decided by the asking price in the market," said the man surnamed Zhang.

Typically, student "mules" from Hong Kong carry iPhones in their schoolbags or strap them around their waists and ankles each time they cross the border to China's mainland.

Some web users in China shared tips on how to smuggle iPhones into the country - such as opening the packaging so, if stopped, carriers can claim the phone was bought for their own use.

Others in Hong Kong were still weighing whether to resell their newest iPhone after securing a pre-order.

"It's all about luck," said information technology officer Danny Lam, 28. "I kept refreshing. My F5 button almost broke."

"I may give it to my sister. I don't need this urgently, so I may check the price with traders. If the price is good, of course I'll sell it."