Early China iPhone launch squeezes smugglers

People check out several versions of the new iPhone 5C after Apple Inc's media event in Cupertino, California September 10, 2013. [Photo/Agencies]

Beijing first

This time, things will be different.

On Wednesday, for the first time, Apple is holding an event in Beijing hours after the U.S. unveiling of its latest iPhone, underscoring the importance of the Chinese market.

Two of Apple's carrier partners - China Unicom and China Telecom - have already said they will carry the newest iPhone models within days of their launch.

China Mobile, the world's biggest carrier by subscribers, is expected to seal a deal with Apple shortly after the launch, some industry executives said.

"Once China Mobile signs a contract with Apple, that will also take away some business from the grey market," said Bryan Wang, an analyst with Forrester Research in Beijing.

While the early launch is seen hampering the smuggling trade, it won't wipe it out totally.

"The market will not be fully diminished because a sizeable portion of consumers on the Chinese operators' network will still want to buy a new phone themselves before their contract runs out," Wang said.

Consumers on pre-paid tariffs will have to buy the phones without the operators' subsidies if they cannot wait for their contract to run out.

So while the smugglers are losing out on the time advantage and price premiums, they are still taking no chances.

Laying the groundwork for Wednesday's launch, an ad posted on Alibaba Group's Taobao.com offered: "Hong Kong students to help you buy iPhone 5, 5S, 5C", with the latest editions priced at 5,000-7,000 yuan ($820-$1,100) apiece.

Student "mules" from Hong Kong typically carry iPads in their schoolbags or strap iPhones around their waists and ankles each time they cross the border.

In Shenzhen, smugglers promise to have the new iPhones at their counters as soon as it is launched in Hong Kong.

"Come again on the day of the launch. I guarantee the goods will arrive from Hong Kong by early afternoon. In the meantime, why don't you consider getting an iPhone 5? I'm selling them real cheap to get rid of my leftover stock," said a Shenzhen shopkeeper surnamed Zhou, selling iPhone 5 models at a 25 percent discount.