The Unbearable Banishment: How the Chinese in New York scam Apple

Sunday, April 10, 2011

How the Chinese in New York scam Apple

This is the Apple store in Soho.

This is a queue of Chinatown residents waiting to get inside.

You'll stumble across this curious scene in front of Apple retail outlets each time Apple releases a popular product. Are the Chinatown residents obsessed with having the latest cutting edge technology? No, they are not. They are part of an elaborate scheme perpetuated from China, a country flush with disposable income and obsessed with owning prestigious items like Apple products.

It works like this: local Chinese wait in line and pay retail for Apple products, forgoing any contracts with AT&T or Verizon. (In this case, they are after the new, hard-to-get, iPad2.) They will each buy two (the limit per customer) and sell them to a middleman in Chinatown, usually an electronics store. They are then shipped back to China (from where they're made!) and sold at inflated prices. Last summer, they'd paid $600 for an iPhone 4, sell it to their middleman for $750 and it was resold in China for up to $1,000. Workers can earn up to $300 in a single morning.

Apple tried to clamp down on this trading network but advocates for the Chinese went to the New York State Attorney General and cried that they were being discriminated against, so Apple backed off.

It's not actually stealing per se, but there's a wrongness about it. They deprive domestic, legitimate customers of product. They're a crafty bunch, aren't they? How do you like them Apples?


Anonymous daisyfae said...

let economic freedom ring. so long as there are people with more money than brains, there will always be a market for the latest/greatest gadgetry...

April 10, 2011 at 1:05 AM  
Blogger Jimmy said...

Too be honest, I'd call it using their heads. Enterprise in business is how I first started out, and although I'm never gonnae be as big as Apple, I may just make it to being a small tangerine. Besides, it's certainly better than seeing kids selling drugs in New York's less salubrious areas.

April 10, 2011 at 1:40 AM  
Blogger Unknown said...

How can I get a piece of that action? was my first question...

April 10, 2011 at 8:03 AM  
Blogger The Unbearable Banishment said...

daisy: I recently traded my LG for an iPhone and there's something hypnotic about it. If you go into an Apple store and hold one, you've GOT to own it. It's scary.

Jimmy: It's a very clever, very legal end-around. But China's business dealings have always left a sour taste in my mouth from all the state-sanctioned pirating of American goods.

Leah: $300 tax-free CASH for waiting in line a couple of hours? Sign me up.

April 10, 2011 at 9:29 AM  
Blogger savannah said...

the other side of a free market economy, sugar, someone is always working an angle. at this point, the only reason i'd buy an iphone is because when you need to keep in touch anywhere it works! ask the MITM! xoxoxoxo

April 10, 2011 at 3:06 PM  
Blogger The Unbearable Banishment said...

sav: Funny you should mention that. On Friday I dumped out on my LG, drank a cup of the poison and bought an iPhone. It really is a superior product.

By the way, Jimmy. These aren't kids. They're middle aged to elderly. Some of them are VERY elderly. So elderly, that I'm not sure they realize what they're doing.

April 10, 2011 at 4:02 PM  
Anonymous Rob said...

Going to University pretty much cured me of standing in line-ups. I will avoid line-ups like the plague if I can. I'm especially contemptuous of the sheeple that line up for new "products". Like we all need another f*cking "product".

The human capacity to search for "something for nothing" never ceases to amaze me. A similar case:

A number of years ago, when the canuck buck was worth much less than the US dollar, the big American car manufacturers had to offer a different pricing model in Canada than in the US. This meant that high end, high demand vehicles (like diesel engine 3/4 ton and 1 ton 4 x 4 trucks) could be had for much less money in Canada than in the US. There were rules in play to prevent Americans from simply coming up here to buy these units new and then import them back into the US. However, said vehicles could be exported from Canada to the US if they were "used". Opportunists jumped on that one. They would line up people to lease these vehicles for a year at less than market rates, with the stipulation that they put 80,000 kms (50,000 miles) on them in that year. Once the lease was up, they would move the trucks south and sell them used in the US for more than they paid for them new in Canada.

I guess some would say that was win-win for all players. With the exception of the American auto makers. And we know how that turned out for GM and Chrysler.

Don't you find the affinity Asians have for digital electronics to be a bit odd? Pretty much all of the computer shops in our area are owned and operated by Asians. I'm betting that the first "borgs" will come out of China. When that occurs, woe to the rest of us.

April 10, 2011 at 4:52 PM  
Blogger tennysoneehemingway said...

Yeah, I'm not sure that there's really that big a dirth of Apple products, is there?

April 11, 2011 at 1:54 AM  
Blogger Pat said...

I think if the VERY elderly are standing in a queue, they probably know exactly what they are doing.
Let's hear it for the old folks!

April 11, 2011 at 4:40 AM  
Blogger The Unbearable Banishment said...

Rob: Up where you live, do they line up at the Apple stores overnight when a new product is introduced? I don't mean opportunistic Chinese. I mean regular citizens? It's astonishing, to me. Steve Jobs really is a genius. The car scam is a clever one.

Hem: I'm telling can't GET those friggin' iPads!

Pat: I beats sitting in the bingo parlors, I suppose. And don't forget...that's tax free income. There's no way they claim that.

April 11, 2011 at 6:12 AM  
Blogger Pat said...

I haven't been in a bingo parlour in my life. I think the excitement would kill me.

April 11, 2011 at 7:13 AM  
Blogger Kono said...

That's an all-american enterprise right there, free market capitalsim at it's finest...

and yes the regular citizens line up here when Apple releases a new product, that it when someone isn't throwing a brick through the window and robbing the place.

April 11, 2011 at 8:03 AM  
Blogger Jason Quinones said...

fuck apple!

let these people do what they gotta do!

apple more than makes up those "lost" dollars every 6 months when they put out their latest and greatest iGadget and the iZombies buy that shit up likes it's free money.

if i knew their contacts i might do the same thing.

April 11, 2011 at 5:30 PM  
Blogger LẌ said...

Are they hiring? Uh, I'm asking for "a friend."

April 12, 2011 at 10:44 AM  
Blogger Eryl said...

I suppose Apple could solve the problem by selling the products in China in the desired numbers.

April 13, 2011 at 6:06 PM  

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