[Hands0n]

There is some news gaining traction in the public media, initially via the web but also now turning up on forums and twitter even.

Basically, there are literally hordes of people forming queues from the moment the Apple stores close until the following morning. These people are buying up as many iPhone 4 SIM free handsets that the store will sell them in one go. Often four is the limit, paying with cash.

These people are all "runners", getting up to £70 for each iPhone 4 they can buy, for iPhone 4 brokers who export the devices to the middle and far east where they can be sold for several times the UK price. It is a lucrative business that has sprung up around the SIM-free device which can be used anywhere and with any GSM SIM. Not ones for missing a particular market, no matter how short-lived, these brokers have a lot of money to use - they are often criminal gangs - and are not to be messed with. They'll get in, make a quick buck, ruin whatever they touch and disappear when the market is killed off. It is all about money, nothing else.


The Mail on Sunday this week watched the trade unfold at locations across London.
On Thursday Apple was selling 230 unlocked iPhone 4s at the Regent Street store. On Friday it had 430 iPhone 4s to sell at the Covent Garden store.
At 6.50am in Covent Garden security guards stopped people from joining the queue. About 230 were cordoned off behind airport-style barriers waiting for the shop to open.
At 7.30am a manager came out and stood on a chair and said: ‘We have iPhones for you. We will open the store in half an hour. Just be nice. Be orderly.’A cheer broke out as the shop doors opened just before 8am.


Read more: http://www.dailymail.co.uk/sciencetech/article-1313275/Wondered-couldn-t-Apple-iPhone-4-Here-s-answer.html#ixzz10edwEY00

This is all extremely bad news for bona fide UK Apple customers who do not resort to such practises once launch day has been and gone. Less do we typically pay with bundles or rolls of used banknotes.

There are a couple of articles that I found recently, one by the Daily Mail and another in The Guardian (you couldn't get two publications further poles apart) that report the same information. It is clear, from the articles, that the Apple store staff know exactly what is going on. But there appears to be no will or desire to control this abuse.

And meanwhile, the regular UK buyer doesn't stand a chance and is turned away as the handsets are often gone by the time regular folk arrive at the store.

Worse still is a report in one of the articles that the Apple store is opening ahead of their regular time to allow these people to purchase all of the available stock. What on earth are they thinking of? Do they want to cause damage to the brand? The iPhone 4 is an appealing and desirable handset but other alternatives are available and this practise will drive custom away.

Here are a few links - have a read, have a think and let us know what you feel about this. Personally I have written an email to Steve Jobs (no doubt his executive office will handle it one way or another) to let him know what is going on and to ask them to do something. I think it will be pointless restricting the sale to one handset per person - the brokers will merely plant more of their people in the queue.

Citations

Wondered why you couldn’t find an Apple iPhone 4? Hundreds of brokers queue every night to snap up contract free phones to send to Middle East and Asia

Read more: http://www.dailymail.co.uk/sciencetech/article-1313275/Wondered-couldn-t-Apple-iPhone-4-Here-s-answer.html#ixzz10eaYvM4v

British Middle-Men hoarding iPhone 4 Bare Metal Resale Middle East - http://www.isnare.com/?aid=609356&ca=Marketing

HongKong blogger, complete with pictures - http://richardlai.tumblr.com/post/1184434493/iphone-4-for-gold-diggers

The Telegraph "Gangs buying iPhone 4 to sell abroad" - http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8012130/Gangs-buying-Apple-iPhone-4s-to-sell-abroad.html

The BBC News - http://www.bbc.co.uk/newsbeat/11382993

A new Apple store opened at The Metro Centre in Newcastle last week ... and a local Twitterer reported that the queue was entirely composed of people wanting an iPhone 4 only and of a "swarthy" complexion (rather like mine as I hail from other shores).

The nay-sayers
On command, and entirely expected, the nay-sayers, all Apple haters the lot of them, have jumped on the bandwagon to go into full denial mode. Of course the golden nugget handed to them is that the story first broke in the Mail on Sunday, everyone's love to hate paper. But let that not spoil the facts. These queues are there for anyone to witness if they can get up early enough. The iPhone 4s are not there at all - they've gone by the time Mr Average wanders into the store.

Apple's response?
Nothing. A big fat zero. Apple have "refused to engage" in the story. And in my own opinion I think that will do them some reputational harm. The customer will expect Apple to do all that it can to support the bona fide buyer and not make a fast buck at the hands of the unscrupulous. Faced with this situation, if I were in the market for an iPhone 4 SIM free today, I would go elsewhere and buy into Android or even Symbian ^3 with the new Nokia range.

Apple are playing a dangerous game.

[Ben]

Eloquently written up!

The only solution I can see to this problem is that Apple steps up and meets the demand it is getting from markets not currently being served. I can't see any effective way that they can prevent their products finding their way into the hands of runners when, at the end of the day, the Apple Stores and staff are there to sell the things not impede that. On paper, a sale is still a sale. No, to thwart this Apple must address the demand issue. Perhaps it could even set up a way to supply the 'businessmen' without the need for runners, by doing a slightly grey deal with a third party distributor that comes with a nod and a wink to allowing exporters at the action.

I'm assuming the online store is relatively unaffected and I hope that many Apple customers will find a positive experience there.

[blush]

When I went to the Bluewater store this week to buy an iPhone I was told that due to the broker trade issue that all buyers now had to have the box opened and device activated in store. I only had my work phone at the time and Mr blue t-shirt soon lost interest and I came out with the box still wrapped in shrink wrap.

[Hands0n]

@Ben - I do think that Apple have to take a stand in the shops. They owe it to us, we make Apple successful, or not. While I agree that "a sale is a sale" I do feel very strongly about the notion that Apple should be taking care of its bona fide customers. It ignores these faithful at its peril - Apple no longer have the entire field to itself, and recent-comers to the table will be a very real threat to it as Apple has been a threat to the previous smartphone incumbents.

@blush - That is interesting to read, and somewhat pleasing too. I am left wondering if the Apple blue-shirt let you have the device in its sealed box because you were obviously not like the "I'll have four, do you take cash please?" runners that are so obvious in so many ways.

I hate and detest these "brokers" who ruin perfectly good markets. They've done it before, and will do so again. If I had my way I'd make the requirement for people to purchase the goods using a verifiable personal credit card, and then only a single handset in any 30-day period.

[blush]

I must say it is incredibly frustrating to enter a shop with loads of products on sale with twenty or so iPhones on display but none to sell. I really think Apple should have a way of checking stock on the website and have a similar system to Argos with the ability to reserve a product but at for a limited time or even better pay online and pick up in store. I have been the victim of this several times now and it annoyed the hell out of me. The order by website three week wait is really painful having to wait that long.

Well this is now the third iPhone 4 and I have owned it for five days and I think this time I will keep it. After putting the naked phone accidentally with my car keys in my fleece pocket and jogging a brief way I now have very fine scratches on the back which I found rather annoying. I need Apple to make a Kevlar platinum version. I am waiting patiently for the free case but fear I may have dropped it before the case arrives!

[Ben]

Welcome back to the pack ;)

[Hands0n]

Yes, welcome back :)

I am a bit shocked at the various reports I have read of the screen and back being so easy to scratch. One of my favourite responses to people asking me how tough the iPhone 3GS glass is was for me to whip out my bunch of keys, select one of the Yale type and scratch away vigorously to show no marks or blemishes. Frankly, I would not contemplate doing this with the iPhone 4's apparent balsa wood screen :D

[Ben]

Hm. The back of mine has picked up a few very shallow scratches (I think!) but the front still looks perfect.

Not that I can say the same for Ben's iPhone 4 take 1.