According to a September 23rd article in Bloomberg Businessweek, the huge demand for the new iPhone 6 and iPhone 6 Plus is creating an active “grey market” for the devices. There are more than 1000 ads on Craigslist in San Francisco, and the situation is similar is most major U.S. cities. The new iPhone devices are also actively selling for a several hundred dollar premium on EBay.
Retail analysts say it really boils down to convenience. All these resale ads make it clear the U.S. has joined China in having a strong secondary market for iPhones. But analysts point out that China’s gray market is thriving because the new iPhone models aren’t available there yet, which is not the case in the U.S. The U.S. secondary market is being created by a lack of inventory, with many people willing to pay a premium for convenience of not having to wait in line or wait weeks for a home delivery.
Carl Howe, an analyst with 451 Research LLC, also noted that many U.S. buyers are making purchases to resell the products later to Chinese buyers. “Supplies are limited and some people don’t want to take the time to actually go to a store,” Howe explained. “Further, the gray market for phones in China runs as high as $3,000 for an iPhone 6 Plus, so even at $1,000, opportunists can make a profit.”
Voracious iPhone 6 demand in China
iPhones are apparently in voracious demand in China. Jun Zhang, an analyst at Rosenblatt Securities, noted in an e-mail that he estimated close to 500,000 new iPhones have already been smuggled into China.”
Moreover, according to Neil Shah, a research director for devices at Mumbai-based Counterpoint Technology Market Research, up to 5 million new iPhones will be smuggled into China in the next few months. Estimates of when to expect official government approval of iPhone 6 sales in China range from a few weeks to a few months.