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Scalpers Spur Apple To Require Reservations For iPhone

timothy posted about 4 years ago | from the cash-on-the-table dept.

Google 119

thana103 writes "Apple is attempting to block scalpers by instituting new restrictions preventing walk-in sales of the iPhone at Apple Stores in China. Customers must first reserve an iPhone on Apple's website before visiting an Apple Retail Store to complete the purchase."

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News for nerds? (-1, Troll)

Anonymous Coward | about 4 years ago | (#33851862)

My ass.

Is this now a shopping advice website?

Apple advise (1)

arcite (661011) | about 4 years ago | (#33851868)

Maybe they should use some of that non-removable ink similar to what some countries use during voting in elections to prevent 'double dipping'. They could call it the iTattoo. DNA signature matching to device IDs could also work. Both sensible options.

Re:Apple advise (1, Insightful)

Anonymous Coward | about 4 years ago | (#33851900)

I keep imagining Steve Jobs & mates having a laugh about all this.

Executive 1: It works. If we force them to pre-register they still eat it up.
Steve Jobs : Lets see what else we can do.
Executive 2: How about requiring all purchasers to wear a turtle-neck?
Steve Jobs : Maybe but not enough.
Executive 3: We could make an even more broken product. How about no antenna this time?
Steve Jobs : I love it. We'll say its to reduce radiation.
Executive 4: But then the phone wont work.
Steve Jobs : The iPhone isnt about a phone its about owning shiny apple products.

Re:Apple advise (5, Insightful)

ardeez (1614603) | about 4 years ago | (#33852148)

It's weird. Every time Apple do something that appears on the face of it to be consumer friendly,
somebody's gotta have a bitch about it.

>I keep imagining Steve Jobs & mates having a laugh about all this.

Actually, I imagine, like any responsible business they sat around and thought
how best to stop these enterprising people who couldn't give a fuck about Apple from
keeping their legitimate customers from having the device they want at the time they want it.

But hey, if you're an evil bastard yourself then I guess you're going to expect others to be the
same as you, and thereby miss the obvious truth of the matter.

Re:Apple advise (0)

Anonymous Coward | about 4 years ago | (#33852872)

"legitimate customers"? Either way, they're paying for it, right?

Re:Apple advise (1)

bidule (173941) | about 4 years ago | (#33854226)

"legitimate customers"? Either way, they're paying for it, right?

Yeah right. Because resellers are customers.

Re:Apple advise (1, Troll)

Dogtanian (588974) | about 4 years ago | (#33852892)

But hey, if you're an evil bastard yourself then I guess you're going to expect others to be the same as you, and thereby miss the obvious truth of the matter.

You know, you might have had a fair point until that last paragraph where you threw away any legitimacy you had. Even if you disagree with the AC (and his comment came across as somewhat tongue-in-cheek), you're reading *way* more into his motives than any unbiased person would consider reasonable.

It says a lot more about you than it does about him that you ascribe to him the characteristic of "evil bastard". Actually, using your logic (expecting others to be the same as you), this would make you the "evil bastard", though in truth it's more likely that you're a rabid Apple fanboy displaying the typical mark of a zealot that you assume anyone who disagrees with your pet cause is evil and supports everything you stand against.

Re:Apple advise (0)

Anonymous Coward | about 4 years ago | (#33853034)

Actually Dogtanian, I took ardeez's point quite clearly. It is your response which I consider offensive and so biased as to be both obnoxious and cruel. You can't please everyone all of the time, but I'll be damned if the spirit of what is spoken is allowed to be detracted arbitrarily in the language which it is spoken.

Re:Apple advise (0, Troll)

Dogtanian (588974) | about 4 years ago | (#33853304)

Actually Dogtanian

Ironic that you address me by name- or rather, by nick- since there's no proof that you're the original AC. It's possible- or even probable- that you're someone completely different trying to score points and/or simply trolling.

It is your response which I consider offensive and so biased as to be both obnoxious and cruel.

Really? Please explain why.

I made the basis of *my* accusations quite clear and didn't call anyone an "evil bastard", unlike "your" comment.

I'll be damned if the spirit of what is spoken is allowed to be detracted arbitrarily in the language which it is spoken.

Could you please repeat that in plain English?

Re:Apple advise (0)

Anonymous Coward | about 4 years ago | (#33855784)

@Dogtonian suck my asshole clean you #faggot

Re:Apple advise (0)

Anonymous Coward | about 4 years ago | (#33853468)

Amen, brother!!

They are helping their customers. I hate so much scalpers. They are parasites.

Re:Apple advise (1, Insightful)

PopeRatzo (965947) | about 4 years ago | (#33853470)

It's weird. Every time Apple do something that appears on the face of it to be consumer friendly,
somebody's gotta have a bitch about it.

What exactly is "consumer friendly" about creating a false shortage?

Re:Apple advise (1)

vux984 (928602) | about 4 years ago | (#33854238)

What exactly is "consumer friendly" about creating a false shortage?

And your evidence that the iphone shortage in china is false is what?

Re:Apple advise (1)

PopeRatzo (965947) | about 4 years ago | (#33854496)

And your evidence that the iphone shortage in china is false is what?

The fact that Apple puts out a press release trumpeting the fact that you have to sign up at their web site in order to buy an iPhone.

Sales where there's a "limit" of "one to a customer" are well-known marketing gimmicks. Consumers are so well trained that all you have to do is tell them they can only have one of something to get them to want five of them. So people who may not have even bought one are suddenly having friends and relatives buy extras so they can get more of this "limited" item.

Why do you think the term "limited edition" is so pervasive on everything from cars to clothes to games to books.

Do you believe that this story about this new requirement to buy an iPhone in China came from someone doing investigative journalism? No, it came from an Apple press release.

Re:Apple advise (1)

CheerfulMacFanboy (1900788) | about 4 years ago | (#33854862)

And your evidence that the iphone shortage in china is false is what?

The fact that Apple puts out a press release trumpeting the fact that you have to sign up at their web site in order to buy an iPhone.

So if there is no press release, would that mean you are wrong? Okay, show us the press release then.

Re:Apple advise (1)

PopeRatzo (965947) | about 4 years ago | (#33856164)

Okay, show us the press release then.

You'll have to ask "appleinsider.com". You don't find it interesting that this story appears on "appleinsider.com"?

Re:Apple advise (2, Insightful)

vux984 (928602) | about 4 years ago | (#33854930)

The fact that Apple puts out a press release trumpeting the fact that you have to sign up at their web site in order to buy an iPhone.

That is evidence of a shortage.

They did this because scalpers are swooping in and buying them up to resell at inflated prices, which they can successfully do because there aren't enough in the stores for customers to just ignore them and buy directly in the store themselves.

The fact that there aren't enough in the stores is direct evidence that there is a shortage.

What is your evidence that it is a FALSE shortage.

Do you believe that this story about this new requirement to buy an iPhone in China came from someone doing investigative journalism? No, it came from an Apple press release.

Reporting on the iphone shortage issues in china predates this apple press release limiting people to one.

The wii is another product that was seriously constrained for MONTHS after launch, and many retailers did similiar sorts of things to discourage and reduce the impact of scalpers.

Was that a "false shortage" too? Of course not, Nintendo sold every single unit they could ship, and was expanding production as quickly as possible to build more. It was a real shortage.

So again, do you have any evidence that this is a false shortage vs a real shortage?

Re:Apple advise (1)

PopeRatzo (965947) | about 4 years ago | (#33856252)

The fact that there aren't enough in the stores is direct evidence that there is a shortage.

I'm sorry, but in what way are the people who are "swooping in and buying them" not customers? Should I not be allowed to buy iPhones to give as gifts to my family because I'm not the end user?

And is the fact that the stores are not getting enough of them really evidence that there is a true shortage?

Do we know that this "one customer/one phone" policy is not just a way for Apple to make sure that they have personal information on all iPhone users in order to better serve their "strategic partners" via advertising?

It's been some years since Apple has earned the "benefit of the doubt" when it comes to their business practices.

Re:Apple advise (1)

pipedwho (1174327) | about 4 years ago | (#33856750)

Yeah, but when I pay a bunch of people to go into all the local shops and buy up their entire stock, you won't be buying any at all. Not for yourself, and not as gifts for your family.

When this happens, people get even more pissed off and the blame will fall to Apple, not my team of scalpers that are reselling them at double the price.

So, if this somehow also benefits Apple's bottom line, then great. But, in the mean time, it has a definite benefit to the people that are just after buying a phone.

There is no 'benefit of the doubt' required.

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hmmk? (0, Insightful)

Anonymous Coward | about 4 years ago | (#33851874)

So now the scalpers won't have to get off their butts early to go buy some iphones and will just have to be faster than everyone else in the comfort of their homes?

Re:hmmk? (2, Interesting)

hedwards (940851) | about 4 years ago | (#33852104)

That was my thought. At the rate that iWhatevers sell out a bit of that non-removable ink on the thumb would do the trick. All this is going to do is prevent the bourgeoisie from hiring somebody to stand in line for them.

They'll just reserve a shitload of them (0)

Anonymous Coward | about 4 years ago | (#33851880)

The stores will then have to dump them - probably to walk-up sales.

Yet another clever marketing gimmick (0, Troll)

selven (1556643) | about 4 years ago | (#33851882)

"Our iPhones are facing such high demand that if we don't prevent resale people are going to take all of our iPhones are resell them at high prices, and we just can't produce any more! Buy now before people find a way to get around this restriction and all our iPhones get bought up anyway!"

Re:Yet another clever marketing gimmick (1)

shentino (1139071) | about 4 years ago | (#33852036)

Then they should raise the price of the iPhone so that they get the markup.

And also distribute the price hike fairly among everyone who wants it, not just the few lucky scalpers who get in early.

This is a simple case of supply and demand.

Re:Yet another clever marketing gimmick (1, Interesting)

hedwards (940851) | about 4 years ago | (#33852122)

Considering that Apple's thing for quite some time was to overcharge and make it into a luxury good, I'm not sure why they don't do that. People getting up early to buy out goods to flip aren't really the problem. The problem is in cases like sport and concert tickets where half the tickets are sold out before they go on sale. For something like the iPhone, I'm just not sure what the problem is.

Re:Yet another clever marketing gimmick (1)

shentino (1139071) | about 4 years ago | (#33852256)

The fact that people are able to flip them in the first place means that there's a shortage. People are willing to pay more than the sale price or they wouldn't be doing business with the scalpers to begin with.

I think it would be fairer for apple to get a level price hike skimmed from every customer equally than for the lucky few early birds to get theirs at a bargain.

Re:Yet another clever marketing gimmick (0, Flamebait)

XanC (644172) | about 4 years ago | (#33852372)

Thank you!

I'm not sure why so many people think this struggle against basic economics is a normal thing. Why should people be prevented from buying and reselling an item simply because Apple's pricing is stupidly low?

Same story with "price gouging" laws. Here's a hint: there's no such thing as price gouging.

Re:Yet another clever marketing gimmick (2, Insightful)

Quothz (683368) | about 4 years ago | (#33852656)

Same story with "price gouging" laws. Here's a hint: there's no such thing as price gouging.

Yes, raising the price of food or medicine a hundredfold following a disaster that limits supply and access to alternatives is exactly the same as reselling an iPhone for profit. Because in both cases lives are at stake.

While I would never hope there will be a disaster, they happen from time to time, and I truly hope you find yourself in a position in which you must give up your car, home, and life savings to get a few days' clean water for your kids. Maybe then you'll see the difference between that and paying fifty bucks over retail for a toy.

Re:Yet another clever marketing gimmick (1)

selven (1556643) | about 4 years ago | (#33853282)

Nothing wrong with price gouging. If you have 50 [insert valuable good here], either the first 50 people to run to your store will get the good or the 50 richest people get the good. In either case, 50 people get it. Just because lives are at stake, that does not mean that the laws of supply and demand get overturned.

Re:Yet another clever marketing gimmick (0)

Anonymous Coward | about 4 years ago | (#33854480)

You're an asshole.

Re:Yet another clever marketing gimmick (1, Insightful)

Anonymous Coward | about 4 years ago | (#33854784)

Just because lives are at stake, that does not mean that the laws of supply and demand get overturned.

Overturned? No. Altered? Yes.

And by altered I mean do feel free to charge whatever exorbitant price you feel is appropriate for ice, food, water, medicine, etc. Just be aware of one thing. If you raise prices too high and you may find that some people will feel it is simply easier to take the goods from you without offering payment, although some may be generous and give you your life in return for your goods. The less generous will simply take your life and take your goods.

Re:Yet another clever marketing gimmick (0)

Anonymous Coward | about 4 years ago | (#33855364)

Taking goods from shopkeepers? Clearly you have never played an RPG.

Re:Yet another clever marketing gimmick (1)

koiransuklaa (1502579) | about 4 years ago | (#33857078)

You seem to think there is a Law of Supply and Demand. There isn't, not as a natural law or as a law of man: it is an economic model. The law (the legal one) on the other hand does say that price gouging is illegal -- at least this is true in all legislations I've lived in.

So... it looks to me like your "laws of supply and demand" do get overturned when necessary and that most civilizations seem to disagree with your interpretation of right and wrong.

Re:Yet another clever marketing gimmick (0, Troll)

XanC (644172) | about 4 years ago | (#33853398)

In my world, food and water will exist; they may be expensive as you describe, but it will be possible to get them.

Price-gouging laws ensure that such goods aren't available. At all. Is that an improvement?

Re:Yet another clever marketing gimmick (1)

Duradin (1261418) | about 4 years ago | (#33852734)

This is why we can't have nice things.

Re:Yet another clever marketing gimmick (0)

Anonymous Coward | about 4 years ago | (#33852452)

gimmick? simply supply and demand.

Use the computers in the store? (3, Interesting)

penguinchris (1020961) | about 4 years ago | (#33851886)

I have, on several occasions, walked into an Apple store solely to use the internet. Especially useful if you're out of the country and don't have a local sim card with data (assuming you're in a country and city with an Apple store and happen to be nearby it...) They don't seem to mind and the wi-fi is free and open, so if you have a smartphone you don't have to take up one of their computers (I have an N1 and an Apple Store worker in London gave me a dirty look for loitering in the store using that on their network - I guess he'd have been ok if it was an iPhone?)

I don't really see how any system like this will stop dedicated scalpers... I am not sure why they don't just limit them to one per customer (one iPhone policy... ahem).

Ya, right (0)

Anonymous Coward | about 4 years ago | (#33851914)

As if people in China can really afford a real iphone to begin with, they just buy a knock off. Only the snobs in China care about buying a "real" iphone.

I only use quotes for "real because I'm sure that the same factory that make the "real" iphones make the knock-off too...

Re:Ya, right (3, Informative)

Dogtanian (588974) | about 4 years ago | (#33852938)

As if people in China can really afford a real iphone to begin with, they just buy a knock off. Only the snobs in China care about buying a "real" iphone.

You might find this article [mir.com.my] of interest. It's a few years old, but the basic story is that Nikon sell a low-end, mediocre-quality camera made by Cosina under their own name to developing markets like China because people there want to own a leading brand like Nikon, regardless of the actual quality of the camera. (As the article states, the Centon camera- which was intended for expert to the West- was a higher quality device).

Re:Ya, right (2, Insightful)

Bert64 (520050) | about 4 years ago | (#33853374)

The problem with doing that, is it devalues your brand...

Re:Ya, right (1)

furball (2853) | about 4 years ago | (#33854036)

Only if that model is exported out of China.

Re:Ya, right (0)

Anonymous Coward | about 4 years ago | (#33854336)

This is different from other markets how? Americans will buy Celerons just to own an Intel, when for the same price they could have a much more competitive AMD processor.

Branding is a fool's game no matter where you are or how much money you want to spend.

LOL (-1, Troll)

Charliemopps (1157495) | about 4 years ago | (#33851916)

So did apple pay slashdot to post this or what? Even if it's true, who gives a shit?

So now... (1)

KazW (1136177) | about 4 years ago | (#33851952)

The scalpers just have to work in teams instead of one person buying all the phones at once... Do you really think they'll have a hard time organizing this?

I agree with a comment above, this is purely a marketing gimmick.

Re:So now... (1)

hedwards (940851) | about 4 years ago | (#33852144)

Presumably, Apple had already decided to impose a limitation on the number of them that could be purchased by an individual. I believe that's why when they were selling in the US there was that credit card only policy.

Which pretty much just makes this a gold mining type of operation, rather than having to get out prior to the launch and sleep on the steps of an Apple store, they can get up an hour before pre-order launches and get their reservation.

iBay? (4, Insightful)

Ichijo (607641) | about 4 years ago | (#33851974)

Scalpers exist wherever there's a shortage. Shortages exist wherever the price of something is held below what the market will bear. So it seems the best way to eliminate scalpers is to raise the price.

Perhaps an auction would be called for here.

Re:iBay? (1, Interesting)

Anonymous Coward | about 4 years ago | (#33852184)

Hmm I think Apple wants to eliminate the high price that people have to pay to get a phone, not the scalpers directly.

Re:iBay? (2, Insightful)

antifoidulus (807088) | about 4 years ago | (#33852360)

That would solve exactly nothing(well, it would alienate and piss off a lot of Apple's customers). Since Apple would still be required to take returns and refund the purchase price having an auction would still mean that buying up tons of iPhones would be an almost 0 risk proposition to the scalpers whilst simultaneously allowing the scalpers to become even more efficient because they can create snipe bots etc that can always make sure they are the top bidder(and then turn around and try to sell it for more.

Re:iBay? (4, Insightful)

phantomfive (622387) | about 4 years ago | (#33853340)

Scalpers create or contribute to the shortage. That, and not every company is out to gouge their customer to the maximum amount possible.

Re:iBay? (0, Troll)

malus314 (1484329) | about 4 years ago | (#33854452)

>That, and not every company is out to gouge their customer to the maximum amount possible.

I never thought I'd hear that phrase with regards to Apple.
Pardon me while I go look out my window, I need to check for flying pigs.

Re:iBay? (1)

CheerfulMacFanboy (1900788) | about 4 years ago | (#33854968)

>That, and not every company is out to gouge their customer to the maximum amount possible. I never thought I'd hear that phrase with regards to Apple. Pardon me while I go look out my window, I need to check for flying pigs.

I didn't see you complain against any of the posts bashing Apple for not jacking up prices.

Re:iBay? (0, Troll)

ZDRuX (1010435) | about 4 years ago | (#33855326)

That, and not every company is out to gouge their customer to the maximum amount possible.

..do you have a source for this misinformation?

Re:iBay? (3, Insightful)

phantomfive (622387) | about 4 years ago | (#33855390)

Yes, and that is many times I have seen companies do things that would indicate they are not out to gouge their customer to the maximum amount possible. If you look, you will see it too, unless your preconceived notions prevent it.

Not too long ago, Costco had a choice to pay the stock-holders a higher dividend, or give their customers lower prices. They chose to give customers lower prices, and were punished for it by stock-holders. The thing is, companies are run by individuals, and not every individual is motivated by gouging their customer to the maximum amount possible.

Re:iBay? (1)

KingAlanI (1270538) | about 4 years ago | (#33855456)

yeah, if people are willing to pay that much, at least get the money yourself rather than let scalper middlemen pick it up.

Maybe the list price attracts more people than can fit in the arena or more than your manufacturing capacity, maybe the scalper premium attracts fewer people than can fit in the arena or less than your manufacturing capacity, a problem of sorts either way.

If directly sold, but at the scalper premium price, you eliminate some of the difference as-is, because you've worked around the scalpers' costs. The savings would be distributed to the original seller and/or consumers. [How exactly to distribute those savings is a separate issue]

You could also engage in more price discrimination [more pricing tiers], but that's easier for sporting events and concerts, as you could place people in different regions of the performance space (balcony, ground level seating, standing floor, et cetera.)

Scalpers? (2, Interesting)

beaker8000 (1815376) | about 4 years ago | (#33852014)

So when you buy an ipnone and resell it you are a 'scalper' with all the negative connotation. However if you buy IPO stock form a company and resell it you are an 'Underwriter', and if you buy cars from a company and resell it you are a 'Car dealership'.

Re:Scalpers? (-1, Offtopic)

Anonymous Coward | about 4 years ago | (#33852250)

Why are you surprised? When you buy software and resell it you are a 'criminal'.

I'm amazed that Apple haven't included a licence agreement (applicable as soon as you think about buying an iPhone. Yes, we know...) that forbids any money transfers related to Apple products unless they pass through iTunes or an Apple store.

Re:Scalpers? (5, Insightful)

Dynedain (141758) | about 4 years ago | (#33852632)

Both underwriters and car dealerships purchase in structured deals with contractual boundaries that set wholesale pricing structures.

Scalpers are people who buy something at retail, turn around and sell it at retail for a huge markup, preventing other retail purchasers from buying at the merchant-set rate and intentionally causing scarcity issues. Think tickets for concerts, or the shortages of Wiis and PS3s when those first released.

For example, most concerts and sports games are not truly sold out. Scalpers purchase blocks of tickets, and resell them at much much higher rates. Because of their profit margins, they have no incentive to sell all their tickets, causing an artificial scarcity. People who were willing to buy at the set price get blocked out, and the venue ends up with empty seats.

Car dealers and stock underwriters on the other hand, have every incentive to sell every item they purchase. Unlike scalpers, they are providing a benefit to their service by organizing distribution and sales channels. In these situations, the original product source (IPO, factory) doesn't want to sell direct, they prefer to sell wholesale and let someone else take on that responsibility. Scalpers on the other hand are simply injecting themselves as an additional layer post-retail and do not add any value with their service.

What the summary describes is clearly a scalper, someone who's taking advantage of a situation and causing even more scarcity issues and driving up prices, just to garner profit with little risk or added value.

Re:Scalpers? (1)

daethon (1349241) | about 4 years ago | (#33852962)

One thought

Scalpers provide a needed service as well, though, by providing last minute tickets for people who don't think far enough ahead to purchase them at the box office.

While their net impact maybe negative, they also provide a service.

Re:Scalpers? (1)

beaker8000 (1815376) | about 4 years ago | (#33852990)

Ok, a couple of points: (1) Now, yes stock underwriters provide a service, in particular they price security issues and provide liquidity. But hold on, thats exactly what scalpers do! They provide liquidity by buying all the iphones, and then price and sell the iphones. Just like traditional underwriters the scalpers take all the risk - what they don't sell they lose. The only difference here is Apple is saying 'Whoa, I didn't hire an underwriter!' so you are a dirty scalper. Apple is asserting they have monopoly rights to underwriting their products. They don't. (2) Apple can make more iphones. So the analogy to concert ticket sales in not apt. If the 'scalpers' buy all the iphones, apple can make more to satisfy customers. Now, when the scalpers turn around and dump the iphones this will pressure the retail price, which is what apple doesn't like. So apple doesn't like scalpers because meeting scalper + retail demand may lead to lower prices - they lose price control. But whenever an underwriter gets in the middle, the seller loses price control. And this is absolutely to the detriment of the seller in IPO underwriting too. Research has shown IPO shares are consistently underpriced. Lastly, my point is throwing out pejorative names is misleading. Maybe we should call these people 'iphone liquidity providers' so they can get a fair discussion on their merits, and are not maligned from the start.

Re:Scalpers? (3, Insightful)

BasilBrush (643681) | about 4 years ago | (#33853330)

Apple is asserting they have monopoly rights to underwriting their products. They don't.

They do, in that the can choose who they sell to. In particular they can choose to only sell one per person until such point as the manufacturing ramp up covers demand.

And it's all good if the filthy scalpers are cut out. And yes, scalpers (or touts in British vernacular) is exactly what they are, not underwriters.

Re:Scalpers? (1, Interesting)

beaker8000 (1815376) | about 4 years ago | (#33853464)

They don't have monopoly rights under the law, and rightly so. If you can get around the one per customer rule (how hard is that because it is not legally enforced) you can buy and resell the iphone. This is because we still have some moderate voices in government who can see through the name calling (and have probably taken a couple economics courses as well). And speaking of Brits, there is a Brit right now attempting to corner the market for cocoa beans (what you would call 'scalping'). Again, perfectly legal and rightly so.

Re:Scalpers? (0)

Anonymous Coward | about 4 years ago | (#33854144)

They don't have monopoly rights under the law, and rightly so. If you can get around the one per customer rule (how hard is that because it is not legally enforced)

Well, it's harder if you have to register your name online for every phone purchased... hmm, maybe Apple should require that.

Re:Scalpers? (2, Interesting)

BasilBrush (643681) | about 4 years ago | (#33854540)

It's not at all hard to get around the one per customer rule. But as it's one per credit card, it's enough to clip the scalpers wings.

Now clearly YOU don't think there's anything wrong with scalping, just as spammers don't think there's anything wrong with spamming. But as far as the rest of us are concerned a rapid removal of both types of parasite from the gene pool would make the world a better place.

And you're deluded if you think there's an economic justification. Scalpers don't provide a service. Every person who ends up paying multiple times the ticket price is someone who has been denied buying one at ticket price by the dirty scalpers. They are not far removed from thieves. Indeed many people combine those careers.

Re:Scalpers? (1)

beaker8000 (1815376) | about 4 years ago | (#33855260)

I just meant in economics you don't need a special word for buying stuff and trying to sell it for a higher price. And I'm not a scalper, so it doesn't follow I'd support scalping. However I did buy tickets to a grateful dead concert from a scalper back in the day. I waited till the show had started and got the tickets for less than the scalper paid.....I guess we can agree that ended well...cheers.

Re:Scalpers? (1)

pipedwho (1174327) | about 4 years ago | (#33856838)

Scalping is a common term used to described a particular type of buy/sell situation. Feel free to read numerous other posts above as to why it differs. Pay attention to how artificial scarcity is created by the act of scalping, thus further driving up the price.

In pure economic terms, Apple could just raise the price on the iPhone until the supply catches up to the demand. But, Apple doesn't want to be a bastard, nor does it want to let someone else bastardise the process.

Also, you were lucky to get your concert tickets after the show started. Generally, events that attract scalpers, also attract sell-out crowds, and people that turn up at the gate are more than likely to go home disappointed if they aren't prepared to pay through the nose.

Re:Scalpers? (2, Interesting)

UnknowingFool (672806) | about 4 years ago | (#33853800)

(2) Apple can make more iphones. So the analogy to concert ticket sales in not apt.

The analogy to PS2 and Wii scalpers does apply. And the situation arises not just because the supply is mere limited. The problem is the demand at the time exceeds the supply. For concert tickets, those particular shows are restrained and the artist is popular at the time. If the artists falls dramatically from popularity when they visit the next year, then there might not be the need for scalper

If the 'scalpers' buy all the iphones, apple can make more to satisfy customers. Now, when the scalpers turn around and dump the iphones this will pressure the retail price, which is what apple doesn't like. So apple doesn't like scalpers because meeting scalper + retail demand may lead to lower prices - they lose price control.

That assumes that (1) scalpers have no common sense and (2) Apple cannot control the manufacturing process in response to supply and inventory levels. Scalpers are not going to amass and later dump iPhones. The whole reason that they have any chance at a profit is that the current demand exceeds the current supply. If the supply is adequate, then scalpers have no market. If they hold onto the products too long, their profit margin dwindles as supply picks up. Certainly they can undercut the retail price but since they paid retail and not wholesale price they also undercut their profit margin.

Apple sets prices and supply. If they products don't sell, they don't make as many and mark them down later in the year as they release new versions. Also Apple's retailers will do the same. If they have too many of a product, they order less or stop ordering.

But whenever an underwriter gets in the middle, the seller loses price control. And this is absolutely to the detriment of the seller in IPO underwriting too. Research has shown IPO shares are consistently underpriced. Lastly, my point is throwing out pejorative names is misleading. Maybe we should call these people 'iphone liquidity providers' so they can get a fair discussion on their merits, and are not maligned from the start.

Underwriting is vitally necessary as underwriters have the capital required where as few sellers have. Most sellers can't afford to underwrite a $200 million IPO in additional to normal business expenses. Also underwriters have the expertise on how to launch an IPO. Generally many businesses do not have experience with IPOs. Most of the time, they may have a small percentage of the company that dealt with it, but the rest of the company is more experience with the aspects of that business whether it be software, pharmaceuticals, etc.

Re:Scalpers? (1)

beaker8000 (1815376) | about 4 years ago | (#33854072)

Im not saying underwriting isn't necessary, I'm saying underwriting and what is termed scalping both serve the same purpose. And let's take a second to look at stock underwriting (scalping). Friday 10/8/2010 6,400,000 shares of GEDU were sold in a IPO priced at $10.50 per share (i just picked the latest IPO but this works for most). GEDU closed friday at $12.20 per share. This means the company lost 6,400,000*(12.2-10.5) = $10,880,000 by the underwriter pricing the shares too low. This is in addition to IPO fees to the underwriter of about 7% (and did you know no matter what underwriter you go to you always pay about 7% - collusion). See research by Jay Ritter at the University of Florida for more about IPO underpricing. So pardon me, but buying a few iphones and trying to sell them for more money is no different than what most people try to do all day.

Re:Scalpers? (1)

UnknowingFool (672806) | about 4 years ago | (#33854396)

Im not saying underwriting isn't necessary, I'm saying underwriting and what is termed scalping both serve the same purpose.

The difference you're not grasping is "collaboration". That makes their purposes different. An underwriter works with the company. A scalper works only for himself.

So pardon me, but buying a few iphones and trying to sell them for more money is no different than what most people try to do all day.

That's your right to do what you want; but my opinion of you is that you're a scalper not an underwriter. You don't get to change my opinion.

Re:Scalpers? (1)

beaker8000 (1815376) | about 4 years ago | (#33855166)

I do grasp the lack of collaboration. But let me ask you a question. Company A sells stock directly to the public. Is there anything stopping banks from buying up that stock and trying to resell it at a higher price? Nope, so it can pay to work with the underwriter. The point is when what you sell starts to support a secondary market, the underwriter relationship will form - whether you approve or not. And I don't want to change your mind.....close your 401K and sell all the assets you own....lest they go up and you make money....;)....maybe the disconnect is that you see stock as a different thing that a phone...but stock is just a claim on the income generated when then company sells a phone....anyway, cheers

Re:Scalpers? (0)

Anonymous Coward | about 4 years ago | (#33853532)

Maybe Apple should pay for more phones to be built by the sweatshops and STFU. Businesses are tanking every day, maybe Apple should just be happy that its loyal servants are forking over the money. It doesn't matter if they buy it from the Apple Store, apple.com, Amazon, or a scalper. Apple's getting paid on the front-end, back-end, and even in the middle.

Re:Scalpers? (1)

Macdude (23507) | about 4 years ago | (#33853646)

Both underwriters and car dealerships purchase in structured deals with contractual boundaries that set wholesale pricing structures.

So it's not scalping because of the collusion? BTW: Car dealers will not hesitate to sell a car above sticker price (at a premium) if there is a big demand for it.

Scalpers are people who buy something at retail, turn around and sell it at retail for a huge markup, preventing other retail purchasers from buying at the merchant-set rate and intentionally causing scarcity issues. Think tickets for concerts, or the shortages of Wiis and PS3s when those first released.

What you have just described are free enterprisers who are exercising their rights to make a profit in a free enterprise system.

BTW: They are not creating a scarcity of the item in question, they are taking advantage of the scarcity -- there is a common economic term that covers this, "supply and demand". They aren't doing anything commodity traders don't do.

People who were willing to buy at the set price get blocked out, and the venue ends up with empty seats.

So what you're saying is the retailer has under-priced the item they are selling and someone else is risking their capital in order to capitalise on that. What's the problem with that?

Car dealers and stock underwriters on the other hand, have every incentive to sell every item they purchase.

"Scalpers" have the exact same incentive to sell every item that they purchase that a car dealer or stock underwriter does -- profit.

Unlike scalpers, they are providing a benefit to their service by organizing distribution and sales channels. In these situations, the original product source (IPO, factory) doesn't want to sell direct, they prefer to sell wholesale and let someone else take on that responsibility. Scalpers on the other hand are simply injecting themselves as an additional layer post-retail and do not add any value with their service.

As a consumer I don't give a rat's ass what service a wholesaler provides to the manufacturer. I only care what service they provide to me and scalpers provide a very valuable service. They allow people who are willing to pay for the privilege, to buy tickets to shows (for example) at their convenience.

Re:Scalpers? (1)

KingAlanI (1270538) | about 4 years ago | (#33855590)

Yeah, the artificially-low official prices often seem to be a case of irrationality, on both the part of the retailer and the part of the average customer.
Trying too hard to be "Fair", and Failing

Re:Scalpers? (1)

zippthorne (748122) | about 4 years ago | (#33856438)

So it's not scalping because of the collusion? BTW: Car dealers will not hesitate to sell a car above sticker price (at a premium) if there is a big demand for it.

Oh, how quaint. The sticker price is already at a premium. It's set above what they expect to get, because they expect you to haggle. "invoice" is the new "sticker" and they make plenty of profit at that price, too....

Chinese Scalpers? *Squeeee*! (1)

Greyfox (87712) | about 4 years ago | (#33852060)

Truly they have learned the lessons of free market capitalism well! I feel like a father watching his child take its first steps! So proud... so proud...

Re:Chinese Scalpers? *Squeeee*! (1, Informative)

Anonymous Coward | about 4 years ago | (#33852092)

China has had "scalpers" before the USA (or the UK for that matter) was even founded.

Re:Chinese Scalpers? *Squeeee*! (2, Interesting)

hedwards (940851) | about 4 years ago | (#33852150)

When they start selling the reservations they don't really own to other people, and people write it off as capitalism then they will truly understand American style free market economy.

This is what the zealots do not know yet... (-1, Troll)

bogaboga (793279) | about 4 years ago | (#33852072)

...Well, that Apple now has a [new] problem to deal with when it comes to the iPhone 4. Call it Glassgate [technewsworld.com] . I am just glad that the iPhone herd mentality has not yet had any effect on me. Wait a sec...where is my Droid?

Re:This is what the zealots do not know yet... (1, Offtopic)

Animats (122034) | about 4 years ago | (#33852204)

Call it Glassgate.

Apple claims to be using aluminosilicate glass for those things. That's a tough material, but it's not a flexible one. For a device which depends on its outer glass layer for rigidity and impact protection, a laminate with a polycarbonate interior layer would have been a better choice. Most devices with a glass surface have a raised exterior ridge which usually hits before the glass does. The newer iPhone does not.

Adding an aftermarket rubber bumper ruins the aesthetic, so that's not the answer.

Re:This is what the zealots do not know yet... (4, Informative)

uglyduckling (103926) | about 4 years ago | (#33852754)

Have you actually seen an iPhone 4? It absolutely does have a raised exterior ridge, and is actually less prone to scratching than the previous designs where the thickness was greatest at the centre. AFAIK, the issue with the glass cracking/shattering seems to do with a sharp object (like a small stone) getting between the iPhone and a case, and scoring the glass just as a glass cutter does.

Re:This is what the zealots do not know yet... (4, Insightful)

Graff (532189) | about 4 years ago | (#33852428)

I'm not calling any negative situation any name with gate at the end. It was stupid the first time anyone did it after the Watergate affair and it's only gotten worse with time. Give it up now or keep looking stupid when you say repeat the meme.

Re:This is what the zealots do not know yet... (1, Funny)

Anonymous Coward | about 4 years ago | (#33854892)

Graffgate

It's just traffic control (2, Interesting)

Animats (122034) | about 4 years ago | (#33852266)

This is just because the retail outlet had a temporary traffic jam, not because it's a big deal. Foxconn can make more of the things than Apple can sell.

I'm surprised the scalpers bother. They're only marking up the thing by 10%. All it takes is one truckload of new units to put them out of business and leave them stuck with inventory they'll have to sell below retail.

That happened when the PS3 came out. People were buying them to sell on eBay. Once production ramped up, the resellers were desperately trying to unload their inventory at a loss.

Re:It's just traffic control (2, Informative)

Anonymous Coward | about 4 years ago | (#33852546)

You're right... in the long term.

However, looking short term, iPhone4 supply is being overwhelmed by enormous demand from China, Korea, and other Asian countries. Enough opportunities for scalpers.

I live in Korea, so I know that -- over 300k units have been supplied to Korea alone in September. After China joined in the fray, Korea too is suffering from lack of supply -- there are more than 150k unfulfilled reservations right now. You can bet there are people willing (more like desperate) to pay 20-30 % mark-up for one "right now". Problem is there are not too many people willing to offer their precious iPhones even at such a mark-up since KT (the mobile provider) has placed a strict one-reservation-per-person policy. (now relaxed to 3-reservations-per-person)

Re:It's just traffic control (2, Interesting)

uglyduckling (103926) | about 4 years ago | (#33852782)

I don't know about that 10%. In the UK, during the period when Apple were only shipping pre-ordered phones, they were selling on eBay for GBP 800-1200. That's a 40-100% markup. I very nearly sold mine on, but actually needed a working phone, diary and mobile email so decided to hang on to it.

what? (1, Insightful)

ILuvRamen (1026668) | about 4 years ago | (#33852354)

That doesn't make an ounce of sense. If you can just walk into a store and buy an iPhone, you can't scalp it because anyone can do that (until they run out). If you need a reservation, that makes it harder to get the iPhones which means the scalpers would get reservations as early as possible and scalp them even higher. I guess it somewhat prevents scalpers from buying like a dozen of them but really doesn't help the problem.

Re:what? (2, Interesting)

VendettaMF (629699) | about 4 years ago | (#33853626)

Actually, given that the scalpers are almost certainly in the employ of the store and get to buy the items in bulk before the store is open, this reservation system in the control of Apple outside of China is a futile effort that had to be made.

Google? (0)

Anonymous Coward | about 4 years ago | (#33852598)

What does this have to do with Google?

Re:Google? (1)

CheerfulMacFanboy (1900788) | about 4 years ago | (#33855046)

What does this have to do with Google?

TFA uses Google Translate to translate (who'd have thought) the page from the Apple China web site. Why, do you mind the Google slashvertisement?

Reservations required? (5, Funny)

Guppy (12314) | about 4 years ago | (#33852608)

I can see where this is going. In a few more years, you'll need to dress up in Formal Wear to pick up your Apple Gizmo.
Scene at swanky Apple Store. A bouncer scowls at the line forming up, as desperate customers try to slip the Maître d' a little something to find a spot for them. Meanwhile, inside...

Customer: Monsieur! Your finest iPhone, if you please.
Snooty Waiter: Our very best from Shenzhen, China. A Foxconn 2018, very good year.
Snooty Waiter cuts shrinkwrap and offers it to the customer.
Customer: *sniff* Excellent bouquet, Polyolefin with just a touch of plasticizer.
Snooty Waiter: Excellent choice, sir!

Re:Reservations required? (0)

Anonymous Coward | about 4 years ago | (#33855104)

Artificial shortages create perceived value. That is how Europeans managed to buy islands for some worthless trinkets.

You're joking, but Apple already banned online sales in Japan to prevent tarnishing of the brand image and hurting markups.

Which shows that while typical consumer idiocy has no limit, the idiocy of Apple buyers exceeds that by a large margin.

Logo (1, Insightful)

Anonymous Coward | about 4 years ago | (#33853226)

It is not entirely obvious to me why of all the possible logos you could have chosen for this story you picked the Google logo.

Seriously, why does Apple care? (0)

Anonymous Coward | about 4 years ago | (#33853484)

A sale is a sale is a sale.

Re:Seriously, why does Apple care? (1)

UnknowingFool (672806) | about 4 years ago | (#33854604)

Maybe Apple cares about customer service. If their customers are upset/going to be upset about scalpers, Apple will have to deal with it. So they are trying to deal with it upfront.

That makes NO sense. (0)

Anonymous Coward | about 4 years ago | (#33857110)

A person without a phone is by default NOT a customer.

Chinese Marketing... More capitalist than Jobs... (0, Flamebait)

VendettaMF (629699) | about 4 years ago | (#33853612)

This being China (where I live) it's a pretty damn solid guess that the scalper in question is, or is in the employ of, the Apple store local management.

If people are willing to pay (or can be tricked into paying) more than the Apple sanctioned price then any store manager or employee here who didn't take the chance to skim a chunk from the marked up price would be physically and verbally abused by his (Yes, "his", not "his/her". This is China) mother when he got home.

Re:Chinese Marketing... More capitalist than Jobs. (0)

Anonymous Coward | about 4 years ago | (#33855218)

How is that different from Jobs - he's creating artificial shortages to scalp people too.

And he's doing it on a WAY larger scale than any Chinese "scalper", be he, she, it, or something else.

Huge profits in HK grey market (0)

Anonymous Coward | about 4 years ago | (#33855204)

This is great news for people living in HK. We can just keep ordering iphones from apple an then sell them on the grey market for approx. 100% profit. Easy money.

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