One Person's Criminal is Another Person's Street-Level Entrepreneur

Casey Neistat created a 6 1/2 minute film called Black Market Takes Over the iPhone 6 Lines that shows portions of what happened at the Apple Store SoHo and other Apple stores in Manhattan on the day before and the day of the iPhone 6 release.

The film focuses on a number of people of Asian descent who do not appear to speak English waiting in line to purchase iPhones. The purchase pattern illustrated was that these buyers bought iPhones (presumably unlocked models) for cash and then, almost immediately and in the vicinity of the Apple Store, apparently sold these phones to other people for cash.

The film says that the purchasers are agents representing resellers in China who will resell these phones. Presumably, most of these resales will occur before the iPhone 6 and 6 Plus officially go on sale in the People's Republic of China.

I think what's important to note about this film is that the issue is not Apple's worldwide product release method at all. At most, the resale activity Neistat depicts represents a side-effect of the failure of the Chinese state regulatory agencies to approve the iPhone 6 and 6 Plus in a timely manner. These regulatory agencies include agencies like the Ministry of Industry and Information Technology, and collectively function as the equivalent of our Federal Communications Commission (FCC) and perhaps our Federal Trade Commission (FTC) and Underwriter's Laboratory (UL):

The Ministry said in a statement that four models of iPhone 6 -- A1586, A1589, A1524 and A1593 -- have passed 3C (China Compulsory Certification) certification and won approval from the State Radio Regulation of China.

China's 3C certification, similar to the European CE system, is a mandatory certification system that inspects and approves various products to be sold in the Chinese mainland market.

But iPhone 6 still needs to obtain a key network access license before it can enter the Chinese mainland market.

-- Apple iPhone 6 wins two regulatory approvals in China, Xinhua, September 18, 2014


I would argue that, in an effort to show that they control the Chinese smartphone market and Apple does not, these agencies delayed approval of the iPhone 6 and 6 Plus beyond Apple's planned worldwide release date. By doing so, they created a situation where a graymarket of epic proportions could redevelop overnight. This graymarket may now be exploited in the fashion described in the film.

The only thing I'm really sorry about with respect to this film is that the filmmaker chose to highlight the Chinese people standing in line in New York as if they're victims being exploited by criminals from China who are referred to as "Chinese mafia". (Some people also call use of the term "Chinese mafia" racist.) I imagine that the people who waited in line made enough of a profit on resale of the iPhones they purchased to justify their time standing in line.

In this case, one person's criminal is another person's street-level entrepreneur.