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Apple Stops Accepting Returns and Exchanges in Hong Kong Ahead of New iPhones

I'll bet this has to do with fraud component exchanges for offical iPhones.
Also many people selling iCloud locked iPhones on the dirt cheap (e.g. iPhone 6S 128GB iCloud locked for $200CAN) and then shipping it over seas. The remove offical screen, cameras and whatever else replace with cheap knock-offs and break the screen damage battery connections. Then replace and boom $400+ aftermarket sales (200% up).

Apple is not having this no more.

I say switch the policy ... give the user an iPhone 5/5S (in usable condition, buffs scratches etc) and THEN make the user wait 10 days for Apple to officially confirm its' an original product. If not user returns their loaner - heck give them BlackBerry 10 devices there is a LOT of those around lol. Then return fake device. If real then honor warranty.
 
Chancha said:
Price fixing by Apple itself, sales tax, and generally high demand means an iPhone when newly released, is often in very low supply within Mainland China white market. Then Hong Kong being literally a river across South China, having no sales tax, lower Apple price and lower exchange rate to USD means there is significant profit to be made for smugglers.
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In addition to sales tax... Apple products are - for the purposes of customs/taxes - not made in China. The factories are in bonded zones - https://www.nytimes.com/2016/12/29/technology/apple-iphone-china-foxconn.html - which means when they are sold in China there will also be import taxes levied. The tradeoff would be, if this didn't happen, every iPhone would be more expensive worldwide (or Apple's margins would be lower. haha. yeah right.) as imported components such as the processor (they're made in Taiwan, aren't they?) would attract import taxes.


The price fixing is almost certainly on the whole, similar to that in the UK. China has certain "consumer rights" legislation that goes beyond the limited 1 year warranties offered by Apple, in the same way the UK does. Do Apple provide that extra service out of the goodness of their hearts? Nope. They charge for it, up front, in cold hard cash, built into the awful exchange rate.
 
A bit surprised when I saw 'Hong Kong' in the headline of an entry lol

As a native Hong Konger, to the best of my knowledge, people buying iPhones for profits (using 'bots') are known as 果農, which means 'Apple farmer' literally. Most of them are believed to be local Hong Kong people. They use whatever methods they can use, including using computer programmes (aka 'bots') to buy iPhones online on the Apple online store. Normal users can't compete with them because the new iPhones are instantly sold out because of those 'bots'.

Those 'Apple farmers' use 'bots' to buy iPhones at launch (in around September-November), and the year 2010 (iPhone 4) was believed to be the craziest year of all time. Back in the years around 2010, China was not part of the 1st batch of countries / regions selling iPhones, but Hong Kong was. Therefore those 'Apple farmers' bought many iPhone 4 and sold them to the middlemen, and those middlemen carried those iPhone 4 to mainland China for sell. There was a grey market.

Back in the year 2010, an unlocked iPhone 4 (mobile phones sold in Hong Kong do not carry any SIM locks) in Hong Kong costs HKD $4,988 for the 16GB model, $5,888 for the 32GB.

iphone4_order.png

(https://unwire.hk/2010/10/07/iphone4-1day/mobile-phone/)

Those 'Apple farmers' could buy an iPhone 4 for, let's say HKD $5,888 for the 32GB model, using 'bots' online on the Apple online store, and they could sell it to the a middleman for around HKD $10,000 or even more. As a result, those 'farmers' could earn about HKD $4,000 or more. Clearly there was a grey market here in Hong Kong.

Ever since the iPhone was available at launch in China, the grey market has become less intense and crazy, but still an iPhone 6 in 2014 could let an 'Apple farmer' earn about HKD $3,000 because of reselling.

-----

In the year 2012, the iPhone 5 was launched, and as you may know, the iPhone 5 easily suffered from 'scuff marks'. The 'Apple farmers' knew that if the middlemen found the iPhone 5 having scuff marks, the middlemen would depress the price, so the 'farmers' kind of 'abused' the return policy on the Apple online store until thy got hold of a 'perfect' iPhone 5 for selling to middlemen.

In the year 2015 (iPhone 6s) and 2016 (iPhone 7), because of the fact that the availability of iPhone was not a problem anymore in China, the grey market was not as active as before, and those 'Apple farmers' might cancel the orders online on the Apple online store when they found the middlemen had collected enough iPhones. I'm not sure if those 'farmers' would be charged for a fee or not, but the policy allowed them to do so (cancel the order to prevent further loss). Like a stock market, isn't it?

-----

Apple's decision now is definitely a good news to those genuine iPhone users in Hong Kong, but also because of those 'Apple farmers', genuine Hong Kong iPhone users are deprived from the rights they once had, which is kind of sad.
 
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Mic'sBook said:
Apple's decision now is definitely a good news to those genuine iPhone users in Hong Kong, but also because of those 'Apple farmers', genuine Hong Kong iPhone users are deprived from the rights they once had, which is kind of sad.
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In this day and age, who buys an iPhone they might not want, anyway? I'll be glad if this increases availability in HK and I can pop across the border and get one more easily...

Do you happen to know what could be returned before this policy change? Apple Watches (since at least December 2016, probably earlier but thats when my proof dates back to) and accessories like watch bands and phone cases already couldn't be returned. Is this actually a change bringing online purchases in line with retail store purchases, and scrapping the returns period for those?
 
nicho said:
In this day and age, who buys an iPhone they might not want, anyway? I'll be glad if this increases availability in HK and I can pop across the border and get one more easily...

Do you happen to know what could be returned before this policy change? Apple Watches (since at least December 2016, probably earlier but thats when my proof dates back to) and accessories like watch bands and phone cases already couldn't be returned. Is this actually a change bringing online purchases in line with retail store purchases, and scrapping the returns period for those?
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The policy does increase the odds of a legit user getting his hands on the phone (despite it still being extremely difficult for weeks last time with iPhone 7).

However, at the same time the consumer rights is also weakened, you can be a legit buyer but landed with a DOA defect unit, Apple will not exchange it and you are immediately put into repair order which can take substantially longer time than a plain new phone replacement.
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Anson_431 said:
Chancha's comment basically summarized the whole reason why this "market" even exists. But an easier explanation is, this is because of the currency exchange rate of RMB and HKD allows them to make a profit from reselling. Thus since iPhones sold in Hong Kong are unlocked international models, they don't have the tweaks and SIM lock they get from the devices available in China, hence creates a demand.

But to be honest, iPhone is not the only thing that has a market for in Hong Kong.
(Yes, and I'm sort of ashamed to have to admit this. lol)
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The SIM unlock nature actually means the Hong Kong version is well sought after for other grey markets than China's as well. I have heard Indian or East European "businessmen" buying these phones in bulk, back their home they usually have sky high "Apple Tax" or plain have no official Apple presence. Sometimes unlocked models are also popular on the internet for countries with all their phones locked by cartel carriers.
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k.alexander said:
Excellent answer, thank you.
I am traveling to HK, from USA, in November; my first visit. Is there anything worth buying (for myself or family) in HK that would be a better deal/cheaper than buying it here in US? I'm asking about iPhones, photography gear, and pretty much anything. Thanks.
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If you don't worry about having no warranty back home, pretty much all electronics are cheaper by dozen % than what you get in the US. Exception are products that are huge in size where shipping yourself is expensive and/or difficult, such as a 77" OLED TV. price.com.hk is a pretty reliable aggregator of the cheapest listed price of stuff in the city (it is possible to buy even cheaper than that but not advised for a foreigner).
 
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Chancha said:
However, at the same time the consumer rights is also weakened, you can be a legit buyer but landed with a DOA defect unit, Apple will not exchange it and you are immediately put into repair order which can take substantially longer time than a plain new phone replacement.
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This is one of the consumer rights that i mentioned you pay for in China. Guarantee of a refund on a defective unit returned within 7 days, a guarantee of an exchange within 2 weeks, and repairs thereafter.

If Hong Kong had those consumer rights laws, Apple would not be allowed to escape them as it is now doing. Not sure how many people were buying iPhones online (was it a move from scalpers buying in store to online since all retail store returns were stopped before the iPhone 7 launched?) but for people buying in a retail store in Hong Kong, this changes nothing that hasn't been in place for 11 months already.
 
Is anyone at all interested in why Apple is doing this now instead of on iPhone launch day like last year? Who cares about the "smuggler".
 
Anyone want to take a stab at rendering a Product (red) iPhone 8? Use the rounded top screen corners/black face concepts.

That would be a sweet design!
 
[doublepost=1502813735][/doublepost]
If you don't worry about having no warranty back home, pretty much all electronics are cheaper by dozen % than what you get in the US. Exception are products that are huge in size where shipping yourself is expensive and/or difficult, such as a 77" OLED TV. price.com.hk is a pretty reliable aggregator of the cheapest listed price of stuff in the city (it is possible to buy even cheaper than that but not advised for a foreigner).
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Thank you!
 
Hong Kong is a hotbed for black market electronics due to the lack of import taxes and duties added to foreign goods purchased, as is the case in neighboring mainland China. Scalpers often attempt to illegally smuggle new iPhones across the border to mainland China to make significant profits.
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What puzzles me the most about this story is how iPhones can be considered foreign goods in China. That's literally where they're manufactured.
 
nicho said:
This is one of the consumer rights that i mentioned you pay for in China. Guarantee of a refund on a defective unit returned within 7 days, a guarantee of an exchange within 2 weeks, and repairs thereafter.

If Hong Kong had those consumer rights laws, Apple would not be allowed to escape them as it is now doing. Not sure how many people were buying iPhones online (was it a move from scalpers buying in store to online since all retail store returns were stopped before the iPhone 7 launched?) but for people buying in a retail store in Hong Kong, this changes nothing that hasn't been in place for 11 months already.
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Yes, Hong Kong somehow earned its edge in international trade by having virtually no laws protecting anyone more than the basic rights, it is such free market driven which is good bedrock for being a middleman of goods. But normally this lack of protection to the buyer translates into cheaper upfront price, which oddly for Apple, or perhaps naturally so, they are still fixing the HK iPhone/Macs price by a margin as if they had those warranty terms included.

The (old) difference between the retail and the online stores seem to be a technical one. It used to be the retail stores that were hit the hardest during a new iPhone horde, since the online store has various means such as requiring pre-order with a locally registered ID, locally registered phone number for SMS, etc. But in the last few years there are computer scripts, possibly using arrays of pre-paid SIM card interfaces to defeat that system pretty efficiently.

Case: with the iPhone 7 launch, the Jet Black plus model was so sought after that it literally only shows up on Apple Online Store for half a second before it was gone. Apple was already feeding the list only a few / a few dozen at a time.
 
Chancha said:
Another much more complex issue is modders. The city where most electronics are made/assembled, including the iPhone, is Shenzhen just next to Hong Kong. There are people skillful enough to have 90% of actual electronic guts swapped out of an iPhone, just keeping scrapped battery and motherboard to boot up a white logo screen and stay there. Apple Store employees have no means to verify if it is a legit return or as they refer to a "lego'd phone".
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I'm not going to explain how we do it, but I decline repair for iPhones with 3rd party modifications all the time.
 
DeepIn2U said:
I'll bet this has to do with fraud component exchanges for offical iPhones.
Also many people selling iCloud locked iPhones on the dirt cheap (e.g. iPhone 6S 128GB iCloud locked for $200CAN) and then shipping it over seas. The remove offical screen, cameras and whatever else replace with cheap knock-offs and break the screen damage battery connections. Then replace and boom $400+ aftermarket sales (200% up).

Apple is not having this no more.

I say switch the policy ... give the user an iPhone 5/5S (in usable condition, buffs scratches etc) and THEN make the user wait 10 days for Apple to officially confirm its' an original product. If not user returns their loaner - heck give them BlackBerry 10 devices there is a LOT of those around lol. Then return fake device. If real then honor warranty.
Click to expand...
Yes the lego'd component swapping issue is real. Check out the youtube video where some guy literally walked through various shops in Shenzhen and managed to assemble a working iPhone himself.

Apple Hong Kong actually does have the "generosity" of lending a temp phone for prolonged verification / repair period. iPhones that are stuck at white Apple logo boot screen need to be sent to Singapore for legitimacy verification which can take as long as 21 days, an Apple authorised repairer (not Apple Retail Store) then offers an iPhone 6 16GB refurb unit for the wait time.
 
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Hope he doesn’t get a text message. He’ll have to delete it manually on each phone…
 
Damn, I love that red iPhone in the picture. I wish the iPhone 8 would come in red, too.
 
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