The New York Times has uncovered an underground smuggling ring led by Chinese people in the United States who buy the iPhone 4 to resell in Mainland China.
“People wait in line at an Apple store to buy the newest iPhone for $600, paying a premium to skip AT&T contract. They then sell the phones to middlemen, usually at electronics stores in Chinatown, for about $750,” wrote the NY Times.
The report explains the block-long lines outside Apple stores in New York, containing mostly Chinese people waiting to buy the iPhone 4, which will soon be launched in the country.
Cupertino-based Apple has allowed sale of maximum two iPhone 4 per person.
The young Chinese people purchase at least two contractless handsets for $600, which they then can sell at the market in Chinatown for $750 each.
The phones are then sold off to e-retailers or exported to China and are sold for as much as $1,000.
According to Shang Jin Wei, professor and director at the Columbia Business School, limiting the availability of iPhone 4 across the globe is a marketing strategy by Apple, forcing gadget lovers to shell out high amount for the premium gadget.