China’s grey market could take off again as Apple’s new iPhones face a delayed launch

China’s grey market could take off again as Apple’s new iPhones face a delayed launch

Apple’s slate of new product announcements was predicted well before this week’s event, but the US company did manage to pull a surprise when it omitted China from the list of markets that will be first to receive the iPhone 6 and iPhone 6 Plus.

The company’s phones had traditionally been late to market in China, but that appeared to change last year with the iPhone 5s and iPhone 5c — both of which premiered in China at the same time as the US and other tier-one markets. When the devices launched last year, Apple even arranged a press event for local media that weren’t able to travel to the main US event.

This year, however, there has been no word on China, and that’s ominous, as the New York Times explains — particularly since Chinese carriers were offering customers pre-bookings for the devices well before they were unveiled.

china-mobile-beijing-iPhone-6-preorder

So what’s going on?

The NYT cites a source at China Telecom who says that “Apple completely let us down without prior notice.” The carrier and its two rivals — China Unicom and China Mobile — declined to comment on record, as did Apple, but it seems that the issues are outside of Apple’s control.

Reports in China have suggested that the Ministry for Industry and Information Technology, which approves all electronic devices that access radiowave spectrum in China, has yet to verify the devices which means they cannot legally be sold.

It’s not clear whether that is because the phones were submitted late — that seems unlikely given the timely iPhone 5s and 5c launches — but China’s recently hostile approach to international companies raises some concerns.

Qualcomm, Oracle and Microsoft have each been probed by Chinese authorities for varying reasons. This is part of a general crackdown from Chinese premier Xi Jinping who has slowly tightened his control of the internet, including an unprecedented crackdown on Google services — which have been largely inaccessible since late May.

534A1588

Apple has taken some heat too — it was subject to a report from state-run China Central Television which highlighted alleged privacy issues with its location tracking feature. Though Apple responded quickly to explain that it doesn’t retain users’ data, the fact that it was targeted could suggest that it is on the list of international firms facing a tougher time in China.

That said, Apple began using local servers to store user data in China — a move that is certain to appease Beijing — while it has placed significant emphasis on the country, which is its third-largest market and is growing more rapidly than North America and Europe.

Either way, the delay is concerning. China is the world’s largest smartphone market, the rate of mobile internet access there recently overtook that of desktop PCs showing its vast potential. Apple’s brand remains strong in China, despite the emergence of a range of lower price rivals, it’s in the company’s best interest to resolve the issues and get its new phones — particularly the larger-sized iPhone 6 Plus — out into the market.

For now, the delay could reignite China’s grey market, resellers who purchase devices overseas and sell them in China for a sizeable markup — Apple had appeared to have conquered the phenomenon in China. Expect to see the return of ‘scalpers‘ at international sales events unless the situation changes between now and next week’s launch.

Headline image via AFP / Getty Images, second image via iphoneincanada.ca

Read next: Coinbase extends its Bitcoin buying and selling service to 13 countries in Europe

Here's some more distraction

Comments