iPhone 6 resellers crowd out Apple fans at front of lines

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Customers outside the Apple Store in downtown San Francisco, moments before the door opened Friday. Photo: Jim Merithew/Cult of Mac

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.

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The line Friday morning at Apple’s San Francisco store. Most people at the head of the line appeared to be buying iPhones for others. Photo: Traci Dauphin/Cult of Mac
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.

Some people in line turned their backs when I took photos. Photo: Traci Dauphin
Some people in line at the San Francisco Apple Store turned their backs when I took photos. Photo: Traci Dauphin/Cult of Mac