Back in July, after an American blogger visited China and came across several false Apple Stores, several other Apple lovers posted about counterfeit stores across the globe. Several of those were located in China, and while Apple cracked down and filed lawsuits against several defendants and managed to get two stores shut down, it seems the effort hardly made a dent in China’s thriving gray market.
According to Beijing-based research firm Analysys International, 1.07 million iPads were sold during the second quarter of 2011. An astounding 49 percent of those purchases were made through unauthorized vendors, who buy products from overseas and resell them in China.
Apple has several official Apple Stores in China, but the genuine stores didn’t sell the 3G versions of the iPad 2 until September, which is a full six months after the tablets were released in the U.S.. As a result, many consumers who wanted a 3G iPad 2 were forced to turn to resellers.
iPhones and iPads are often released in China weeks or months after they come out in the United States. For example, the iPhone 4S will be released here on October 14th, but Apple hasn’t even announced a release date for China. Prices are also lower in the U.S. than in China, where a 64GB iPad 3G costs approximately $986. That’s over $150 more than the price consumers in the U.S. pay.
Gray market vendors are able to offer iPads for lower prices than legitimate stores and still turn a nice profit. During new releases, illegitimate vendors can take advantage of Chinese customers who want the latest and greatest right away, by charging even higher prices.
Despite the launch of the 3G iPad and the opening of new Apple Stores, Analysys International analyst Sun Pellin says that gray market still has many advantages that attract customers, and unauthorized sales will continue to remain steady in China.
Apple has little control over unauthorized resellers, with no way to contact distributors. The company recently hired third party firms to regulate and monitor the selling and distribution of Apple products, but this will continue to remain a problem until Apple is able to make same-day international releases.
This was an issue for U.S. consumers when the iPad 2 was released, with international buyers purchasing and shipping iPads overseas in bulk, contributing to a serious shortage of the tablets. This led Apple stores to limit purchases and even refuse some customers who revisited day after day to circumvent limits. It was an ugly situation, and one we may see repeated with the iPhone 4S beginning on Friday.