You’ll never hear it from Apple (NASDAQ: AAPL), but ever since the first iPhone was launched, there has been a thriving, extremely lucrative black market in China and Hong Kong for the latest iPhones. Oddly enough, the players in this back-alley world range from well-heeled and opportunistic Westerners to the poorest Chinese locals looking to get their first real taste of American entrepreneurship with a Chinese twist. It’s a world where black-market iPhone prices are updated daily in a manner eerily reminiscent of Wall Street in the 1920s. It’s a world where consumers pay twice the retail price right after an iPhone debuts. With profit margins so high, it’s not hard to understand why this back-alley business has flourished for so long but this world is about to come to a violent halt with the latest iPhone 5.
Now, some will say they’ve been to China numerous times or maybe even lived there for years and never heard or saw anything of this nature. Well, unless you live and operate among the locals in the backstreets of places like Chongqing, China (a rapidly growing megacity of more than 30 million people) you won’t see this black market. (Most visitors’ exposure to China is limited to highly Westernized cities such as Shanghai and Beijing.) As for those who would assume that Apple would attempt to stop this thriving black market that just isn’t the case.