Did Apple's new iPad flop in China?
The first is that Apple has taken steps to address one of the bigger problems at its product launches in China: scalpers. Highly organized teams of ambitious scalpers typically plague product launches, with people being transported in and being paid to stand in line while scalpers amass devices to resell them at a profit. The scalpers sometimes outnumber legitimate customers, so Apple has implemented a reservation system that requires prospective buyers to register interest in advance. Buyers are assigned a specific time to swing by and pick up their devices, helping reduce line congestion while also mitigating scalpers.
The second is that many consumers already have iPads, thanks to a robust gray market where devices are smuggled in. While the new iPad just launched in Mainland China, the tablet has been on sale in Hong Kong since March at the same time as the United States. The device is also cheaper in Hong Kong thanks to tax discrepancies. Ambitious resellers will load up on iPads in Hong Kong and smuggle them across the border. Estimates are as high as 200,000 units making the trek over the past four months, representing roughly 1,500 per day. That's helped satiate demand for the new tablet ahead of the official Mainland China launch.
As far as how investors should interpret the news, that means that instead of seeing a calendar third-quarter boost from iPad sales in China, Apple has likely already been enjoying that boost for its earnings release due out tomorrow. The device was launched in March with only two weeks left in the first quarter, so if those estimates turn out remotely accurate, most of those 200,000 units would have fallen in the just-closed quarter.
The company very well might have an iPad blowout in store after all.
This article originally appeared on Dailyfinance.com.
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