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Chinese iPad2 Resellers Are Everywhere!

Posted by C.S. Hsia on · Comments

iPad2 madness is sweeping around the world, even though officially it's only been released in the United States. The fact is, many of these devices "Designed by Apple in California, Assembled in China" are heading straight back to China. Some of them even by the same express courier.

I've never had an issue with resellers, it's simply the free market at work. If some of these kids want to wait in line for hours to make a few bucks on eBay, that's totally fine in my book. In the days before Apple's popularity, many of us have done this with game consoles.

However these Chinese resellers are now an organized effort, and it's hurting consumers everywhere. Including Apple. Here's what I saw:

On Monday 3/14 (the first day post-launch when some stores had a shipment), I arrived at the Apple Store in Manhasset NY at 9:30AM, hoping to get a 3G iPad. I had already purchased a Wifi model on launch day for my sister, but my heart was really set on the 3G AT&T model. Coincidentally, over the weekend news from the Hong Kong gray market is that the iPads, selling above $1,000 for even the base model, have almost all sold out in HK. The organizers are now putting together another effort to get more iPads into Asia.

As I stood in line with those I consider real end-consumers (moms, uncles, kids with blankets there since 7AM), cars started to roll up to the store. Each time, 3 Chinese men smoking cigarettes would step out, run to the line, as the 4th person goes to park his car and rejoin the group. This repeated multiple times for 30 minutes. As the group of Chinese men started to swell in numbers, they were increasingly obnoxious, puffing up a thick cloud of smoke and coordinating other buying activities on the phone. (I'm Chinese, I can understand them)

At 9:55, a very friendly Apple employee opened the door and apologized to the crowd. It turns out the iPad2 was not in stock, and a delivery was not guaranteed for the day. Everyone but the Chinese guys left pretty much right away, and the Chinese men looked delighted by the now shortened line.... until one of the men more fluent in English translated the news to the group. They immediately scattered, hopped onto their cars, and sped towards the other Apple Store 20 mins away.

Even though the day was uneventful, this organized activity is really troubling. It hurts the U.S. consumers, give launch events a terribly bad atmosphere, and give Chinese consumers a bad rep.

Apple will always launch products in the United States first, as it's the home market, and largest marketplace for Mac products. However there really needs to be a system to prevent these Chinese resellers from ruining it for everyone else. China has a massive demand for these products, and perhaps a small, limited launch simultaneously in China would help reduce this growing problem.

Any other ideas? chime in below in the comments!

(I realize that there are organized buying groups from all over the world, of all ethnicities. I only used Chinese as an example because it's what I've read from reports in HK, and what I observed from the lines. Also, I would have taken some pictures if Apple didn't brick my iOS 4.3 Beta last night, more on that tomorrow....)