New iPhone X sales fail to sparkle, delivering slim pickings for touts as Apple ensures ample supply

In the past, fanatics have been prepared to beg, steal or borrow to get their hands on the latest Apple iPhone models, the moment they hit the streets.

But efforts this time round by the US giant to make more available and improve deliveries of the latest model - the iPhone X (the “10” and the first to breach the US$1,000 threshold) - appear to have paid off, with plentiful supply in Hong Kong and China.

That also means that the lucrative resale market by touts, or touts reselling for a quick profit, could now be a thing of the past. In fact, the two models Apple launched in 2017 carry with them the thinnest resale margin since the iPhone 4 first became available in mainland China in 2010.

The latest iPhone X hit Hong Kong and mainland Apple store shelves first thing Friday morning.

But instead of buzzing, excitable queues of buyers, twitching for the doors to open so the lucky few who had managed to pre-order could collect them, there were no crowds - only calm in-store pickups, and disappointed touts.

Apple has high hopes for the new iPhone X in its Greater China market, comprising the mainland, Hong Kong and Taiwan, where revenue in its fiscal third quarter ended July 1, fell 10 per cent year on year to about US$8 billion.

Mainland Chinese consumers account for about a third of all iPhone users globally, according to research firm Newzoo. It estimated the mainland had 243 million iPhone users as of July, 33 per cent of the worldwide total.

In the past the profiteers could expect to pocket thousands on new iPhone launch days.

But outside the flagship three-storey Apple store in Causeway Bay in Hong Kong, one surnamed Cheung said he would be happy this time to walk away with a HK$2,000 (US$256) profit from reselling one of more-powerful 256GB models being launched.

He had actually set aside HK$200,000 to buy new phones and flog them to the highest bidders soon after the store opened its doors.

Between 2007 and 2013, mainland customers who could not wait, were the major source of profits for Hong Kong resellers such as Cheung.

But this time round Apple has cleverly offered them for sale simultaneously in both markets, effectively stripping Cheung and his like of the chance of a chunky resale margins. Apple will make 3 million units of iPhone X available in 57 sales markets on November 3, according to estimates by KGI Securities, without breaking down specific numbers for each market.

The additional supply is vital for Apple, which has been losing market share to Chinese brands including Huawei, Oppo, Vivo and Xiaomi.

This year’s prices for the iPhone X are HK$8,688 and HK$9,888 (US$1,267) for the 64GB and 256GB models.

Customers had to pre-order their iPhone Xs online before October 27 to be eligible to collect their phones on Friday. But those pre-orders took just 12 minutes to be collected in Hong Kong, said staff.

“Here in front of the Apple store, I heard offers for the 64GB iPhone X of HK$8,800 and the 256GB for HK$10,500,” said a Mr Chan, who had taken a half day holiday in the hope of making at least a HK$3,000 killing after collecting his pre-ordered phone.

With not a queue in sight, however, he was about to head for Mong Kok, a popular area for shops selling resold phones, in the vague hope of turning a quick buck.

But again, resellers were finding it tough to push price levels beyond HK$9,000 and HK$11,000 for the two latest models.

One businessman surnamed Choi from South Korea, however, said he had placed an order for 10 of the 256GB variant of the iPhone X, telling a shopkeeper if he received them, he would but another 100 more next month.

“I can resell a 256GB model in South Korea for around HK$15,000 before the phone is available in stores there,” he said.

Over the border in Shenzhen, meanwhile, touts were also left wondering why they had bothered, with buyers in equally short supply.

By 10.30 am, some were finding it hard to even get a paltry 100 yuan (US$15) profit over the official mainland price of 8,388 yuan (US$1,266) for the 64GB version, while the more powerful 256GB versions were bagging them slight more at 500 yuan over the official retail price of 9,688 yuan.

“I thought I could make a profit of at least 5,000 yuan,” said one customer who has also taken the day off work just to stand in queue to pick up his pre-ordered phone.

“I’d read iPhone Xs would be in short supply and prices would surge once they went on sale officially,” he said.

Pickings appeared richer for mainland touts for the 256GB model, with some reporting a 1,000 yuan profit. But that’s still the thinnest iPhone resale profit level since 2010, one said.

In Beijing, 31-year-old IT professional Guo Wei even had trouble finding a tout willing to buy his pre-ordered iPhone X, delivered to his office that morning.

“I expected to sell it at 10,000 yuan and earn 1,500 yuan when I bought it last Friday,” Guo said. “But I only made 200 yuan in the end. There’s more than enough on offer.”

Additional reporting by Meng Jing in Beijing, Li tao in Shenzhen.