China cracking down on iPhone 6 smuggling

Hong Kong Customs have been busy seizing iPhone models from suspected smugglers

Smuggled iPhone seized by Hong Kong Customs.

Smuggled iPhone seized by Hong Kong Customs.

Chinese custom agents literally have their hands full with Apple's iPhone 6, as they seize hundreds of units from smugglers attempting to bring them into the country.

Apple has yet to start selling its newest smartphones in mainland China, but that hasn't stopped local electronics dealers from buying the product elsewhere in the world, and then bringing it in for resale.

Vendors in China's grey markets have said they've been receiving iPhone 6 from as far as the U.S. and Australia, but many are also relying on units coming from Hong Kong, the nearest city outside mainland China to officially sell the product.

Local authorities have been cracking down on smuggling and on Saturday, Hong Kong Customs said they had stopped one such operation, seizing 67 iPhone 6s and four iPhone 6 Plus models. The suspected 31-year-old smuggler tried to bring in the phones by car, but was intercepted at a border checkpoint into mainland China, Hong Kong Customs said. Total value of the smuggled goods, which also included 60 used phone screens, was estimated at about HKD$400,000 (US$51,000).

The case was just one of several iPhone 6-related seizures Hong Kong customs made last week. Last Thursday, authorities foiled another suspected smuggling operation involving several men spotted on the coast loading boxes into a small boat. The suspects fled to avoid customs agents, but left behind 286 iPhone 6 devices, for an estimated worth of HKD$1.6 million.

Under Hong Kong regulations, it's illegal to export cargo that has not been properly declared. The maximum penalty is a $2 million fine, and seven years in prison.

Customs agents at Shanghai's international airport have also encountered suspected iPhone 6 smuggling. The airport has so far found a total of 831 iPhones that were not declared by travelers, China's state-controlled Xinhua News Agency reported on Saturday. Of those, 691 iPhones are suspected of being smuggled.

Grey market dealers in Beijing had originally anticipated the iPhone 6 would fetch over US$3,000. But the prices have come far under those projections, according to Device Prices, a service that tracks the grey market electronics market in Shenzhen.

"We have seen a 35 percent drop in iPhone 6 Plus prices in the last week, but only a small drop in the 6," said Mark Francis, Device Prices founder, in an email.

In Shenzhen's grey market, the gold colored 16 GB version of the iPhone 6 can go for 6183 yuan (US$1,006), according to Device Prices. It's larger cousin, the 16 GB iPhone 6 Plus, starts at 8300 yuan (US$1350).

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