Apple takes steps to nip iPhone 4 scalping in bud

By Tuo Yannan (China Daily)
Updated: 2010-10-09 10:02
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BEIJING - Apple has ceased direct sales of its iPhone 4 at its retail outlets in Beijing and Shanghai and is only accepting online orders in order to curb rampant scalping, just 13 days after the company launched it in the mainland.

Customers lined up continuously in front of the four Apple stores in the two cities after Apple launched the popular handset in the mainland on Sept 25.

Although Apple refused to reveal sales figures for the iPhone 4 in China, a salesman at the company's flagship store in Beijing's Sanlitun Village shopping mall said that 1,000 phones were sold within three hours.

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The popularity of the iPhone 4 gave scalpers golden opportunities, who hired people to line up outside Apple stores and charged an extra 600 yuan per device. According to a report in the Shanghai Morning Post, the Sanlitun Apple store closed on Sept 29 due to scalping activities.

Apple China announced the new rules for purchases of the iPhone 4 on its website on Thursday. Customers have to pre-order the phone online with their real name and pick it up from Apple outlets with their identity card or passport. Each customer can only pre-order one iPhone 4 per day, discouraging scalping.

"It is a very good way to prevent scalping," said Beijing office worker Kong Xiangyi.

"I'd rather not have an iPhone 4 than pay scalpers," said Kong.

There are three way to buy an official iPhone 4 in the mainland: pre-order from Apple's website, Apple's official partner China Unicom, or Suning Appliance Co Ltd, the nation's largest electronics retailer.

China Unicom's sales of the iPhone 4 since Sept 25 have exceeded 100,000, according to Li Gang, senior vice-president of the company.

Fan Zhijun, vice-president of Suning Appliance Co Ltd, told China Daily that its daily sales of the handset in Beijing were around 1,000.

Vincent Gu, senior analyst of iSuppli Corporation, an Internet analysis company, said the online order rule is "a marketing measure", and the scalping phenomenon will fade as the novelty of the new product wears off.

"Normally electronic products do not have supply problems, so I think this is a marketing measure," he said.

Beside its Chinese carrier partner China Unicom, Apple was reported to have had "intensive talks" on the iPhone 4 with China Telecom, China's third-largest wireless operator. Deutsche Bank AG analysts were quoted by the Wall Street Journal as saying that China Telecom may be in talks with Apple to offer the iPhone 4 next year.

The Wall Street Journal said Apple may build a Code Division Multiple Access version of the popular iPhone 4 device for the US provider Verizon Wireless's CDMA network. China Telecom uses the same technology.

Apple Inc and China Telecom spokespersons refused to comment.