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Smuggling iPhones into China – the airtime plan piracy

by | 23rd, April 2012

THIS is a slightly weird case. A woman found smuggling Apple’s iPhones into China. When, erm, all iPhones are actually made in China:

A Chinese woman has been stopped at the border after trying to smuggle over 200 iPhone 4S devices from Hong Kong into the Apple-mad nation hidden inside empty beer bottles.

The woman was caught red-handed by customs officials at the Sha Tau Kok border between Hong Kong and Shenzhen and claimed she was taking the bottles to be recycled, according to MIC Gadget.

However, on closer inspection the bottles reportedly felt suspiciously heavy, and showed signs that they had been cut in half and taped back up. In total 216 shiny new iPhones were discovered, shoved in three to a 750ml bottle.

Obviously something weird is happening, as with PJ O’Rourke’s point that you can’t get Cuban cigars in Cuba. But here, with Apple, it’s not the stupidities of communism, it’s the way that mobile phones are generally sold. That is, with an airtime plan.

That you normally (not always, but normally enough) get your phone along with the actual phone service explains this. The telecoms companies buy the phones and then subsidise the sale to you: they intend to get their cash back over the life of the contract you have with them. However, in different territories they will, given the competition available, be able to make different amounts of money. Have to subsidise more or less. Which means that phones, contract or not, will be at different prices in different territories.

As it happens iPhone prices are higher in Mainland China than they are in Hong Kong. Big surprise that, isn’t it? The most nakedly free market place on hte planet has more competition and thus lower prices than a still Communist state? Thus buy in one place and sell in the other.

Image :A policeman, center, tries to disperse a crowd as a notice reading “iPhone 4S was temporary out of stock” on display at the entrance of an Apple Store in Beijing Friday, Jan. 13, 2012. An angry crowd shouted and threw eggs at Apple’s Beijing flagship store after it failed to open on schedule Friday to sell the popular smartphones.



Posted: 23rd, April 2012 | In: Technology Comment (1) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink