iPad2 smuggled back and sold on China grey market
Devices are manufactured in the country, but not officially on sale
London: It's the digital version of the slow boat to China. The iPad 2, made in China but not on sale there yet, is being bought in London and smuggled back into its country of manufacture.
It means the tablet is creating extra carbon emissions as it travels halfway across the world and back again. Customers are queuing to buy the iPad 2 at Apple shops in London and send them 9,656 kilometres back to China.
The tablets are bought for their retail price of £399 for a 16GB model and then taken to China, where they sell for £430 (Dh2,569).
The profit is not in this small mark-up but in the 20 per cent Vat - in this case almost £80 - Chinese tourists can reclaim when they take the iPads out of the country.
No tax is paid to the Chinese authorities by the smugglers, making it a profitable trade for the small timer. It means a student who takes home six iPads can fund his trip to London.
Bought for profit
A worker in Apple's store in Covent Garden said last week: "I've no doubt at all that iPad2s are being bought for profit. Although sales are limited to two per person, I have seen ten people in a queue all buying two each, which I thought was a bit odd.
"We had the same with the iPhone, where people were sending them back to China to sell on for a profit."
Ironically the iPad 2 is manufactured at gigantic factories in southern China operated by Foxconn, a key Apple contractor.
Last week dealers at Shanghai's biggest IT mall, Buy Now Digital Choice Mansion, were taking orders for the new iPad from a crush of buyers cramming into its 20,000 square metres, even though it is not officially on sale there.
"You can only make a booking for delivery next week," said Wang Qiao, a sales girl. "Because iPad 2 is a new generation product, all the iPad 2s here are shui huo [water goods]," she said, using the Chinese slang for contraband.
