SAN FRANCISCO — Since Apple won’t be selling the iPhone 6 in China for some time, early buyers of the smartphone have an opportunity to make a quick profit by reselling the hot handset on the gray market.
The first 50 people in line at Apple’s San Francisco store this morning appeared to be iPhone resellers — a pattern that seems to be have been repeated worldwide on the first day of iPhone 6 sales.
The line here in downtown San Francisco stretched three blocks, with several hundred customers hoping to score Apple’s hot new handset. The character of the line is markedly different from just a few years ago, when hard-core Apple fans camped for days before a new Apple product. In those days, it was all Apple fans and practically no scalpers.
But today in San Francisco, it appeared that most people toward the front of the line were there to buy iPhones for other people. Cult of Mac staffers reported resellers in line in Louisville, Kentucky and Seattle as well.
Aside from people buying a phone for a friend or family member, the most likely market for resellers is China, which is Apple’s biggest market but is one of the few places in the world that the iPhone didn’t go on sale today. Chinese authorities have delayed the iPhone 6, saying Apple needs a special license, but how long that will take hasn’t been disclosed. Neil Shah, an analyst with Counterpoint Research in Mumbai, estimated that 5 million iPhones could be smuggled into China before the official release. Other hot markets denied immediate iPhone sales are Russia, India and Italy.
Photo: Traci Dauphin
China is Apple’s second biggest market in terms of revenue, opening up opportunities for enterprising capitalists worldwide. According to Reuters, resellers were at the head of iPhone lines in Australia, Hong Kong and Singapore. The news agency talked to one reseller who bought 25 iPhones to resell in China.
USA Today reported that the crowd at Apple’s Upper West Side store in New York City was “dominated” by resellers. The iPhone 6 is already widely available on eBay, with 128GB models of the iPhone 6 Plus going for $1,400. They sell for about $900 retail.
I asked several people in line if they were buying iPhones to resell in Asia, but they refused to talk to me. Many turned their backs when I tried to take a photo of the line. One Vietnamese girl admitted she is buying an iPhone to send to Vietnam. She said it was for her family, because the iPhone won’t launch in Vietnam until later.
I asked an Apple employee outside if he thought the people at the head of the line were getting phones to send to China. He declined to speculate. “Customers are customers,” he said.
Things have certainly come a long way since the days when China’s only online iPhone store sold just five handsets in two weeks. Today, Apple couldn’t be any hotter in China — with iPhone market share quadrupling over just three months late last year.
The possibility of making a quick buck by getting a new iOS device first has been obvious since practically Day 1, but it’s only over the past couple of years — as Apple’s popularity in China has skyrocketed — that we’ve started to see scenes like this. In China, Apple has even resorted to a reservation system to cut down on the number of scalpers trying to buy up masses of iPhones or bulk-book Genius Bar appointments.
Another employee at the San Francisco Apple Store said most people in line would probably get an iPhone. The store had 800 iPhones for sale Friday, and customers are limited to buying two iPhones apiece.
Traci Dauphin is Cultomedia Corp.’s CFO, as well as the office manager and all round organizer at Cult of Mac. Traci keeps the trains running on time. She also interviews app devs, writes product reviews and shoots great galleries of events like Macworld.
41 responses to “iPhone 6 resellers crowd out Apple fans at front of lines”
I hate this and wish Apple would actually do something about it.
We have a huge problem with this at my local store in Nashua, NH every time a new device is released. They show up with their stacks of Apple Store gift cards ready to buy out the inventory. The store employees know exactly what’s going on but can’t (or unwilling to) do anything about it. I’ve seen they try to use their numbers to intimidate fans getting in line, like they own the place. My brother experienced it first-hand a few years back, while trying to purchase an iPad mini.
This morning I got accosted by one of their crew while leaving the mall after picking up my iPhone 6 Plus. She kept asking is she could buy it and how many I purchased.
I’m sure its because they want to avoid possible lawsuits or discrimination claims, but it should be within Apple’s rights to refuse service to these obvious resellers. :(
Actually there are ways but they are as you say ripe for a lawsuit. Things like using the same lotto system they have in China to randomize being able to order or reserve a phone. Requiring one to sign into a valid Apple ID that has existed since before the announcement (say it has to be in effect for more than 30 days) or you are restricted to buying only contracted phones or even only 1 every week until you reach the limit of 10 per person. Requiring those ID to have a full billing address on file to verify that someone isn’t signing up for several ids to be able to buy more stuff.
but all of these will only lessen the issue, not kill it. Because the resellers will still find a way. At least until Apple says they will risk the lawsuits and managers are to balls up and refuse service.
With the iPhone 5, at one point the inventory at our store was so constrained that they only sold for personal pickup orders for a week or so. (Walk-ins were told it was sold out, but they could purchase online through Personal Pickup) However, the resellers found a way around it and would order HUNDREDS of phones per day using different AT&T/Verizon accounts. The names on the different orders would be slightly different, but obviously the same person (i.e. Lin Wang, L.in Wang, .Lin Wang, L i n Wang, etc).
People want Apple to do something to stop these resellers, but in reality they will always find a way through some loophole. Also, employees COULD be like “oh, you’re Chinese and you’re not legitimately excited about this phone. You must be a reseller so I won’t sell the phone to you” but that would most definitely result in a crazy amount of lawsuits.
As a current Apple employee who has worked every product launch since iPhone 4s, I can vouch that we’re the people that these resellers have the worst effect on. Anybody who wants to buy the phone doesn’t have to wait in these huge lines or pay a reseller double the price, they can just order it online or wait a couple weeks. As employees, we have to spend 8 hours a day dealing with the shittiness of the situation, being completely aware that these people are scamming the system, and there’s nothing we can do about it. The worst feeling is when some normal person comes in super excited about the phone, but they can’t get it because there are 300 Chinese people in line in front of them that are getting two phones each.
HI! You know, I happen to be of Chinese American descent, look the part, 4th generation from California living in the northwest. I would be horribly offended if someone just assumed I was a reseller based on my race.
I make my decisions on adopting new Apple products based on what generation of release, have never waited in line (don’t have the time or inclination). I have been known to garner the attention of the store employees due to my Bernese Mountain dog, fortunately, or unfortunately, he really distracts the staff and customers and I rather enjoy providing therapy dog services to the staff.
So anonymous Apple employee, this seems so unlike many of the great store employees I have met who do not express your what appears to be a racist attitude. I do not support scalping of Apple products any more than the next guy, unfortunately they come in all shapes, sizes and races.
They aren’t being racist. They’re just proving a point that if resellers come in, buy 10 phones, there’s nothing they can do about it. I worked for apple for 3 years and have had to deal with resellers of every race, but more recently because of delayed Chinese launches many are from China who are resellers for profit. You have no idea what we have to deal with at the Apple Store. Most people don’t.. I’m even surprised there’s an article. This has been going on for years, and has a lot to do with why I left the company. I wish it was like the old days when only apple nerds were buying things. Atleast they were excited and not reselling. So to finish my thought, this person is being honest, not racist, don’t believe? Go to your store you like so much at 6am, and look at the line.
Thank you for be civilized in your reply unlike the previous person who replied to me. Apple employees are between a rock and a hard spot. The company has to walk a fine line between customer satisfaction and being exposed to potential lawsuits in controlling the scalping/reseller participants and it does not sound like there is an easy answer. Requiring people to purchase contract phones is not the answer though maybe not accepting cash or check payments might help prevent this.
I too, strongly object to resellers scalping and dominating what used to be a cultish event for the Apple launches. It degrades the experience of those who want to line up to make legitimate personal purchases.
It is the racial profiling aspect of some of the comments I object to. I have to say, other than the previous poster’s reply to me, this comment thread is pretty civilized compared to some others I have seen on other Mac blog sites. Believe me I think I do know what the employees have to deal with, and the stress of being powerless to deal with this issue and many others can be overwhelming. I work in health care and see the all sides of the human condition.
I agree with you 100% — this is a crew in my hometown who come in every day after a launch and buy 10 or more devices each day.
I agree. one lady kept bugging me for my ticket last year and others cut in line. This year? They can have it.
This happens every year. Apple tries to stop it but there’s no foolproof way. No matter what they try the resellers just find a way around it.
One thing that will likely help is having in store pickup available right off. Legit buyers can order online and use up the stock in the stores so it can’t be sold to resellers standing in line.
Another trick that can help is no device only sales at launch and forced checks with the carriers to see if someone has been signing up for accounts and canceling them over and over. Which I believe they can do and will if they feel someone is suspect (like if someone comes in with a translator who appears to be leading the conversation)
Fuck you Resellers and fuck YOU ALDERWOOD APPLE STORE for not even attempting to employ some system of priority after your que system broke. I was line fir a Verizon 6plus and at least 60-70 people cut before the cops showed up. Needless to say they ran out right at my spot.
I feel your pain.
And I forgot, I arrived at 10 PM last night. Don’t you realize what’s going on when your initial cheers are meet by 50 – 80 people just stupidly staring back at you? Here the cheers behind them? THOSE WERE US!! YOUR REAL CUSTOMERS!!! MORONS!!!!!
Actually, everyone buying a phone is a “real customer” they just may not be the end user. Or perhaps they are. I don’t know why anyone bothered to go to the stores and didn’t just order online a week ago. Far simpler than queuing up for a phone that you know is going to be in limited supply. Heck, I learned that lesson way back with the iPhone 4.
Maybe because they were up at MIDNIGHT and carved through the preorder system like everyone else just to have no access???
At our store in Honolulu, the Apple staff announced that they would not be selling any unlocked phones, only carrier-linked phones, and about 20 people left.
musta been tourists for the Arashi concert ;)
I’m not commenting on reseller behavior.
I am *appalled* at this clearly racist article. What about these individuals makes you believe they are resellers? Are you basing this purely on the fact that many of them present as being from Asian descent? You realize that people from China buy and use iPhones too, I hope.
I’m not necessarily refuting your claim that they are resellers, but you’d better have more evidence than their race to back it up.
@disqus_aDnlZGAQGl:disqus While I appreciate your concern, this is not a fair criticism. Race is not mentioned once in the post. Our reporter based her conclusions on talking to people and noting their behavior. Many people in line cheerfully talked about what phones they were buying and why. They clearly weren’t scalpers. Some of them were of Asian descent (not surprising, because San Francisco is more than 30 percent Asian). One person told us she was buying an iPhone for somebody in Vietnam, but many others at the front of the line declined to talk and turned their backs — likely scalpers. We didn’t specify their race.
conveniently, the one girl that was quoted in the article is of vietnamese descent.
I really appreciate the reply, however I don’t think you’re looking at the same article I am. According to the article, only a single person was willing to speak to your reporter. The article leads with “The first 50 people in line at Apple’s San Francisco store this morning *appeared* to be iPhone resellers.” (emphasis mine), it then includes a photo of the line including almost exclusively individuals who seem to be of Asian descent, and then goes on to talk about the opportunities of reselling the phones to China.
The article presents only the one interviewed person and the provided photos as evidence of the claims, and uses the word “appeared” many times to refer to these individuals at the beginning of the lines and pictured in the photos. The article does not mention that any others were willing to talk about why they were buying phones as a counterpoint to the claim that those at the beginning of the line were not willing to talk. (You mention this in your comment, but it is not present in the article.) You also mention that race is not specified – sure, that’s (mostly) true, but journalism isn’t just about the words – the photos play an extremely important part.
I am willing to concede that you have additional reasons to believe that the line leaders are, in fact, resellers (and I don’t doubt the claim) but this article simply does not supply anything other than the appearance of the individuals as evidence. That’s simply racist.
Racism is not always overt – in fact most racism is casual but insidious. It’s the unquestioned racism present in our everyday lives that does the most harm. If you find yourself getting particularly worked up over a specific claim of racism, that’s a particularly good time to think critically about whether there is some racism going on.
A note to those who would attack my observations with claims that “reselling is a problem” arguments: Well, yes. Resellers are a problem and one that I would love to see something done about. What I object to in this article is the apparent presentation of race, however unintentional it may have been, as implicit proof that the individuals at the beginning of the lines are resellers.
I totally agree. Thank you for saying this. I felt the same way. :)
You’re ignoring what he said, which makes sense because you’re one of those who looks for racism where there is none. Get off your soapbox or high horse, or just quit stretching things beyond reality. Also, maybe read the article a little closer?
Can’t help but think that you’re simply looking for racism when there is none present. China is a huge market for phones, and the posted a true and accurate photo of the line, which happens to include people of Asian decent. The person that would talk to them about reselling the phone happened to be Vietnamese and suddenly they’re racist? What about the tall guy with the beard? He doesn’t look Asian. Perhaps you feel that they should have asked for numerous people of all backgrounds to group together and turn their backs for the photo, but the line is the line… I’m black, and I notice not a single black person in the photo of the line. Shockingly, I’m not offended. I bought my phones online on pre-order day and resold one of them immediately. They can imply that black people are reselling iPhones all they want and it doesn’t hurt my feelings one bit. I made $500 on a phone that I sold in thirty minutes to a guy who said he’s sending it to the Middle East. I don’t care one bit where it’s going, his money goes in my bank account all the same! Everyone who has the ambition to put in a little effort could be making money this way. Profit isn’t racist, it’s awesome.
What a flog you are. Call out racist just because you don’t believe the evidence. The true hallmark of a coward. I’m sick of people like you screaming racism just to bully people. Clearly you don’t understand the problem here. This activity distorts the market and denies real buyers from a purchase. This activity is like ticket scalping. These people, and you, are scum.
That’s a total, TOTAL bullshit reply. Race has nothing to do with this at all. It’s a fact about these scumbag line-sitters and everyone knows it. Get over yourself.
LOL… “Scumbag line-sitter”… They got there first and bought the phones with money they earned. It sounds like you’re the scumbag for being mad at people with more ambition to get the phone than you.
Read the article at all Otis? Aware of what we’re speaking about here? Me, and loads of other people in line yesterday were bum rushed by line cutters and squatters that all came out with two phones before the county sheriffs and Apple staff got involved just like Eric above.
I have ZERO gripe about legitimate end user customers in front of me dip shit. This article is not about those people, tough guy. Sell on eBay much “Otis”?
You must be stuck on stupid !
Err why are they resellers? Cause they are Asian #RacistMuch?
@stanluca:disqus See above. Our reporter never once mentions race.
God forbid resellers buying out iPhones are actually Chinese/Asian. Is it a crime to report the truth now?
Stop looking for offense everywhere.
If you look at this article (http://www.syracuse.com/news/index.ssf/2014/09/iphone_6_plus_line_apple_store_syracuse_destiny_usa.html) you’ll notice a stark difference in tone. Specifically, no one wanted to talk to the reporter and the reporter didn’t automatically use that as reasoning that they were up to something. Also, they mention a Chinese guy who is getting one for his girlfriend’s birthday and they do so without any suspicion that he is not telling the truth (this article used the word “admitted” when taking about the Vietnamese girl in line which suggests the assumption that she was doing something wrong).
That is why the previous commentors felt this article was racist. I tend to agree with them. This isn’t just about being too sensitive and taking offense everywhere.
Nothing to do with race.
Apple could stop this if it wanted. Don’t sell contract free phones on launch day. You buy, on first day, you have to activate with a carrier.
If they wanted to but they are too money grubbing for that to ever happen.
This practice of all the people buying up iPhones who have no other intention than to resell them just pisses me off. In Houston last year there was a very large group of people who spoke no or broken English and who bashed Apple and their products the entire time. They were ALL using Samsung devices and they kept asking us how many phones we were buying and wanted to give us cash to buy additional iPhones for them. By the time we got out of there I was so turned off by the experience that I was unsure I ever wanted to do it again. The people in front of us were being paid to stand in line and buy iPhones with cash. I just felt it cheapened the experience and those of us who were there to buy the newest and greatest iDevice were left out in the cold. They mostly all showed up about 2 hours before the doors opened and there was nothing we could do about it. I’m glad you posted something about this. The race doesn’t have to be mentioned because it’s different in each city you go to. We have ours, which was strangely and largely Russian for some reason. I’ve had friends who work at other Apple stores around the country and they say the same things…especially about the larger city stores in New York and San Francisco. Not sure what can be done about it…but when I read the guy saying something about race I knew that wasn’t the point of the article AND I knew this happened in just about every city. Thanks for posting it. Great to get this out in the light.
So these people don’t want to talk to you so you take pictures of their backs and you publish it?! Feels more like an attempt at public shaming mixed with condescending attitude.
If people don’t want their photos taken you should respect that and either not take it or blur their face. It’s not like we NEED to see their faces!
At my local Apple Store, there was a guy going around offering 50-100 dollars for buying him one. He was a reseller aiming to collect 300 phones. I refused. Many people took the money and bought the second phone for him. He was good for the money though.
Technically it’s legal but very annoying.
in Indonesia they’re selling the 128gb iphone 6 plus for USD 2000 :(