A woman in Hong Kong counts banknotes outside an Apple Store. With the new iPhone 6 delayed in China, hordes of Chinese smugglers are making a lucrative buck sneaking in iPhones from Hong Kong and the United States. (Jerome Favre/Bloomberg)

 

BEIJING -- For those complaining about the price of a new iPhone, try buying one in China.

Delayed by governmental red tape, the iPhone 6 is selling for as much as 10 times the U.S. price in a thriving black market that's popped up in a matter of days.

"You want an iPhone 6?" asked smugglers on Monday just outside Apple's flagship store in Beijing's fashionable Taikoo Li mall.

Sidling up to everyone entering or exiting the store, they made their pitch: $1,430 gets you the cheapest base model (seven times the U.S. price of $199 with a carrier contract). The iPhone 6 Plus was even costlier -- at more than $2,400 (versus $299 at U.S. stores).

But that's a steal, argued one smuggler, considering the fact that the smartphones can't be had at any price in China's official stores.

The smuggler, dressed all in black with a boxed iPhone tucked under one arm, said his crew had laid out their elaborate operation weeks in advance of the phone's Sept. 19 debut. Like most of the roughly 15 hawkers who swarmed around all three exits of the Beijing Apple Store, he declined to give his name.

But in an interview between his hard-selling pitches to passersby, he said his group had folks in line days ahead outside Apple Stores in Hong Kong, which is not bound by the same restrictions as China. Within hours, they sneaked their first iPhones across the border. Within the first day or so, they already had scores on the street.

As Apple awaits approval to sell the iPhone 6 in China, resellers in Hong Kong are turning a tidy profit. (Reuters)

While the current prices may seem ridiculous to some, they've already dropped a few points over the weekend, he lamented. "The first day, I was selling iPhone 6 Plus on the street for almost $3,100. Some paid $3,200 to have it delivered to their door."

All weekend, reports have popped up of overseas Chinese trying to get in on the action, including vacationers in Japan, those with relatives in the United States and Chinese smugglers flying in and out of other locales such as Australia.

A filmmaker trying to capture the madness of New York's lines for the iPhone 6 debut even brought a Mandarin interpreter so he could ask all the Chinese in line who they were buying for. His video implication after capturing a multitude of Chinese buyers making surreptitious handoffs for cash? A resourceful network of smugglers.

The problem and lucrative opportunity stem from the fact that Apple has passed only two of three required regulatory steps for its new phone, according to China's state-run Xinhua News Agency. And it is unclear when it will overcome the remaining one -- licenses for network access from the Ministry of Industry and Information Technology.

Apple's delays come at a time when foreign tech firms have found themselves the target of government investigation and suspicion. In recent months, China launched an anti-monopoly probe into Microsoft. Rumors -- later denied by the government -- have swirled that Apple devices might be excluded from government procurement over security concerns.

Apple representatives in Beijing did not return e-mails for comment on the thriving black market or when exactly Apple expects to receive the needed regulatory permission.

Until then, smugglers say they're enjoying brisk business.

According to a furtive seller outside the Beijing Apple store, a man in a flashy Audi SUV drove up to him over the weekend and bought nine iPhone 6s on the spot, for cash.

"They didn't ask for an invoice or receipt. It was all cash," he said. "Another customer bought 18 phones on the spot."

The next moment, a girl dressed in pink carrying a Prada bag stopped and asked for a price quote.

"Any cheaper if I buy two?" she asked.

 

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