Big Shipment Of Grey Market iPhones And iPads Busted At Hong Kong Border

Next Story

Another Win For Quantified Self And Big Data Startups: Weight Loss Platform Retrofit Gains An $8M Series A Round Led By DFJ

Apple’s iPhone 5 is a popular grey market item, and the proximity of Hong Kong to mainland China makes it a particularly popular choice for stocking up on Apple hardware to be resold in the latter country. Now, there’s been a huge bust by Hong Kong Customs, according to a report by MIC Gadget. A truck containing 227 iPhone 5s, 22 iPads and a number of other electronics was caught yesterday trying to smuggle the goods into China.

The shipment contained roughly 1 million HKD in iPhones (around $129,000 U.S.), some of which were hidden within the actually dash of the truck itself. MIC Gadget notes that the use of a truck with a huge shipment like this is a relatively new development in Chinese smuggling operations, since before tightening security it was more common to just have individuals cross the border with much smaller, separate stashes of grey market Apple goods.

The iPhone 5 has yet to officially go on sale in China, which is likely only driving up demand for the device, though grey market channels remain popular for Apple’s hardware even after it hits store shelves officially in China, because shoppers are often interested in getting the smartphone off contract, which allows them to use it with China Mobile, for instance. And a recent report suggested that about half of the one million iPads sold in China during Q2 2011 were from the grey market. That’s because pricing outside China vs. pricing within the country allows grey market importers to collect a tidy profit and still undersell traditional channels.

The iPhone 5 is commanding very high prices, according to stories from near the device’s launch. It was reportedly selling for around 3,000 HKD more than retail, or nearly $400 at launch. That kind of market has resulted in Apple implementing special measures in China to try to curb the problem, but so far, that’s not really having much effect on stemming the tide of illegal goods crossing the border.