Apple’s iPhone 5 will go on sale in the US and Europe tomorrow, but according to a recent report, the device has already gone on sale on the grey market in Hong Kong.
According to the report, some grey market vendors have already managed to obtain stock of Apple’s new iPhone 5, and are selling the device with prices starting at around $1100. Apple will sell the iPhone 5 in Hong Kong at the equivalent to $720 US dollars.
The Grey Market Phenomenon
The grey market, often referred to as the parallel market, involves the trade of goods through distribution channels that are legal but unofficial, unauthorized, or unintended by the original manufacturer. In the case of the iPhone 5, this means that vendors have somehow acquired the devices before the official release date and are selling them at a significant markup. The grey market thrives on high-demand products, and Apple’s iPhone series has always been a prime target due to its immense popularity and limited initial availability.
Considering that Apple is so tight with security on their new iPhone before they are released, we wonder how these grey market vendors manage to get their hands on the device before it is even released. There are several possible explanations for this. Some vendors might have connections with employees at manufacturing plants or within the supply chain who can smuggle out units. Others might be leveraging pre-release units intended for review or testing purposes.
Impact on Consumers and the Market
The existence of a grey market can have various implications for both consumers and the official market. For consumers, purchasing from the grey market can be risky. These devices might not come with a warranty, and there is always the possibility of receiving a counterfeit or defective product. However, for some, the allure of owning the latest gadget before anyone else can outweigh these risks.
For Apple, the grey market can be a double-edged sword. On one hand, it demonstrates the high demand and desirability of their products. On the other hand, it can undermine their pricing strategy and official sales channels. Apple invests heavily in creating a controlled release environment to maximize hype and ensure a smooth rollout. The grey market disrupts this by offering the product at inflated prices, which can lead to consumer dissatisfaction and potential damage to the brand’s reputation.
Moreover, the grey market can affect the official sales figures. If a significant number of units are sold through unauthorized channels, it can be challenging to gauge the actual market demand and performance of the product. This can impact Apple’s stock prices and investor confidence.
In Hong Kong, the grey market for electronics is particularly robust. The city’s proximity to manufacturing hubs in China and its status as a major trading port make it a hotspot for grey market activities. The iPhone 5’s early appearance in Hong Kong’s grey market is a testament to this dynamic.
Source MicGadget, MacRumors, Ubergizmo
Image credit: ePrice
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