It’s only been four days since Apple launched the new iPad in 10 markets worldwide, but already Chinese media outlets are reporting that some 200,000 grey market devices have been smuggled into Shenzhen, a city bordering Hong Kong.
According to a CUTV report [Chinese] — translated and cited by Tech In Asia — the devices have been brought into the city by importers who ventured overseas to purchase them, with Hong Kong the favored choice due to its close proximity to Shenzhen. It is also said, however, that a significant number of devices were transferred over from the US, where pre-orders and a wider selection of retailers meant shorter queues for customers.
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Those importing devices from the US are reportedly pocketing around $20 per device, that’s opposed to $12.50 for those that make the more common route over from Hong Kong.
The final price that each grey market seller puts on the devices varies, largely due to supply and demand, but initially impatient Chinese consumers itching for the new iPad may need to stump up as much as $1,580 (10,000 RMB). Over time that price is expected to drop to some $80 (500 RMB) above the official sale price, which varies based on memory and Wi-Fi/LTE connectivity.
The estimation of 200,000 doesn’t represent the total number of grey market iPads in China, as it does not include supply into other cities, such as Beijing and Shanghai.
Apple’s ongoing court case with Proview has put it under pressure over official sales of the iPad — after the Taiwanese company threatened Apple suppliers with legal action for shipping and selling it — but such issues are unlikely to deter illegal sales.
Going on recent Apple releases, the new iPad is unlikely to see an official introduction into China for months. Despite these delays, however, Apple is reported to be winning the battle against illegal ‘scalper’ sellers, particularly over the iPhone. With the addition of China Telecom opening the availability of the smartphone to a new mobile network, analysts have said that increased supply has seen demand for China’s grey market shrink.
iSuppli research director Kevin Wang says that the number of grey market device sales peaked at an estimated 4 million in 2010, before declining to 2 million in 2011. Going on that, sales in 2012 are likely to be even lower.
With many Western critics claiming that the new iPad may not be worth upgrading to from the iPad 2, it will be interesting to see what level of demand China’s early iPad sellers see in the country.