Why reselling iPhone X in mainland China won’t guarantee huge profits for Hong Kong traders
Most expensive iPhone available for pre-order in city from October 27
Apple has barely unveiled its newest and most expensive iPhone model, boasting of an arsenal of features such as facial recognition, and many Hongkongers are already planning to cash in by scalping them across the border to mainland buyers.
Hong Kong, mainland China and Taiwan are among the first of 55 countries and jurisdictions where Apple fans can pre-order “the future of the smartphone”, the iPhone X (with X being the Roman numeral for 10), from October 27 at a minimum price of HK$8,588 in the city and 8,388 yuan (HK$10,025) on the mainland.
But the returns from reselling the devices might not be as big as they used to be, as Apple products were now rolled out on the mainland at the same time as in Hong Kong, traders said.
The launch of the first iPhone, 10 years ago, created a thriving “grey market” in Hong Kong.
The same devices are usually more than 10 per cent cheaper in the city than on the mainland, thanks to Hong Kong’s free-port status which means zero duty on most electronic products.
That has allowed many local dealers to make a living by exploiting the price difference for iPhone products between the two sides. The first few days of an Apple product launch have regularly seen grey-market prices double the retail price, due to the limited supply through mainstream channels on the mainland.
Dealers at Sin Tat Plaza in Mong Kok – where store owners collect iPhones from individual sellers and resell most of them to mainland buyers – said they believed the iPhone X had more market potential despite the high cost, with some looking for a 50 per cent premium in the first week it goes on sale.
“Price has never been a big problem for those who use Apple products,” Samuel Lau, who owns an electronic gadget shop at the plaza, said.
He was expecting dealers to earn about HK$3,000 on a basic iPhone X in the first few weeks they made available.
Another dealer, Lo Lau, said he believed the iPhone X could sell at a 50 per cent premium in the first few days but expected the price to drop to the standard retail price within three weeks.
The iPhone X new features mark a leap forward from previous models, whose appearance had not changed much in the past two years.
It features an all-screen display, built with a 5.8-inch OLED touch screen that Apple has branded a “super retina display”. The home button has been replaced with a simple swipe motion to open and close applications.
Users can securely unlock the iPhone using its sophisticated Face ID function. Face ID, which works only when the user looks at the iPhone, is also designed to reject photos or masks, increasing security for facial recognition applications, the maker claims.
While Apple fans are thrilled by the new features of the 10th-anniversary iPhone, critics have noted it is not an evolutionary jump for smartphones. Some have said its edge-to-edge screen looks boxed in compared to the latest Samsung handsets, which also have face-recognition functions.
Apple also updated its iPhone 7 and 7 Plus models with the new iPhone 8 and 8 Plus models featuring glass and aluminium cases, as well as support for wireless charging and augmented reality. These handsets will be available for pre-order in more than 25 countries and territories on Friday and in stores from September 22.
Dealers expect iPhone X sales to be high, partly thanks to the city’s large number of iPhone 6 and 6s users, who are ready to upgrade their smartphones after keeping them for two to three years, shop owner Wong Kwok-fai said.
But it would be much harder to earn a profit trading iPhone 8 and 8 Plus models, which feature only a slight quality improvement over the previous models, he said.
Additional reporting by Bien Perez