Apple stopped acceping order for iPhone 4 in Hong Kong due to iPhone Arbitrage?

iphone 4 hong kong price index

iphone 4 hong kong currently unavailable

On 22nd October, Apple’s Hong Kong Online Store suddenly stopped accepting order for iPhone 4 and iPhone 3GS. No reasons and notice are provided by Apple and all iPhones are just “Currently Unavailable” at Apple Online Store Hong Kong. In this article, I am going to discuss the possible reasons behind this and is this a hint for white iPhone 4 or new iPhone.

iphone 4 hong kong price index

iPhone 4 Price Index (Click to enlarge)

As the title of this post mentioned, iPhone arbitrage is a possible reason why Apple stopped taking orders. So what is iPhone arbitrage? As you may know, the price of an unlocked iPhone 4 16GB is just HK$4988 (US$643), the cheapest around the world. So here is how it works, peoples in Hong Kong order the iPhone 4 from Apple’s online store; after they received the handsets, they then sell them to shops in Sin Tat Plaza (a place in Hong Kong famous/infamous for selling cellphone, used cellphones and phone accessories) at a higher price (check the price index above). As it is basically an almost zero-cost business, what you need to spend are just the time to order the phone and to check order status everyday, some peoples here in Hong Kong just order as many iPhone as they can, so as to earn the margin. That’s the reason why it takes a month to ship an iPhone 4 in Hong Kong, as you can see below:

iphone 4 order details

iPhone 4 Order Details (click to enlarge)

You may ask, why are those Sin Tat shops willing to pay more for iPhone 4 and who are the final buyers of these iPhone 4? The answer is Mainland China. Sin Tat shops collect iPhone 4s, which are then sold to big spenders in China and some southeastern countries or some local Hong Kong peoples who are not willing to wait for shipping. But China is also selling iPhone 4 too, you may say, why don’t they just buy in China? There are several reasons:

  • Apple has not enough stock for China
  • Some Mainland Chinese just think the Hong Kong version iPhone 4 is more complete, while China version may have functions disabled
  • Some of them want to stay on Chine Mobile instead of switching to China Unicom, the exclusive carrier of iPhone 4 in China, and signing a 2-year contract with Unicom

Stopping selling online may be Apple’s way to stop the arbitrage “business” above. Those who want to get iPhone 4 now have to go to three authorized iPhone carriers -Smartone, CSL and 3 – and get the phone with contract, meaning the cost of getting an iPhone 4 is higher. Second, as there’s no more new orders, Apple can now fulfill old orders as quick as possible, flooding the iPhone 4 arbitrage market and thus reduce the Sin Tat price. However, I just wonder why Apple also stop taking order of iPhone 3GS 8GB

Are there any other possible reasons for Apple to stop taking orders? Of course, and there are my guesses and arguments:

  • Real shortage of iPhone 4. – But Apple is still taking orders in other countries and shipping normally, and Hong Kong is really close to the Foxconn iPhone 4 factory that Apple can refill stock really quickly.
  • There are just too many orders that Apple Hong Kong just can’t handle so they decided to stop taking new orders
  • White iPhone 4 is coming – 50/50 Order taken on the day before 22 Oct are expected to ship in early December. As Apple announced before, the White iPhone 4 will be released by the end of the year. So if they are going to release it on December, it does make sense that they stop taking new order now. However, Apple can just keep selling the black iPhone 4 and add the white iPhone 4 when it is released.
  • New iPhone is coming – Same as above.