Manufacturing News

Apple halts iPhone 4S sales after scuffles at Beijing flagship store

It is a familiar scene of the season -- crowds gather in chilly winter, queueing in line for hours or even overnight, tussling to edge ahead.

But the latest mass turnout in Beijing didn't involve people lining up for a Chinese New Year ticket home at a train station, but a queue outside Apple's flagship store in the Chinese capital's upmarket shopping belt, Sanlitun. They were all waiting for the doors to open on Friday morning so they could get their hands on the new iPhone 4. But the doors never did open.

With crowds gathering from Thursday night, scuffles broke out from time to time among the hundreds of Apple fans queueing for the launch of the latest popular Apple smartphone product. Their numbers were swelled by migrant workers hired to queue and buy the devices by scalpers aiming to sell on the iPhones at profit.

Some fought with security guards and pelted the store's glass wall with eggs, according to eye witnesses. Dozens of police cars and ambulances were on standby.

Apple on Friday announced that sales of the iPhone 4S would be suspended for the time being due to security reasons. Apple's flagship store in Sanlitun remained closed for the day.

In a statement, Apple said its stores on the Chinese mainland had already sold out of the iPhone 4S as the demand had been "incredible."

"Unfortunately, we were unable to open our store at Sanlitun due to the large crowd, and to ensure the safety of our customers and employees," said the statement.

Apple's stores in Shanghai met calmer scenes but many fans still fumed as they claimed salespeople acted rudely in trying to manage the crowds.

"Why does Apple wants to do whatever it wants? It seems like they [salespeople] want to put the customers under their complete control," said buyer Kang Zhaojun.

It is not the first time that there have been violent scenes as Apple fans queued up for its latest gadget. Apple's series of products from iPods, iPhones to iPads are extremely popular among China's youth.

China, with nearly one billion mobile phone users and about half a billion Internet users, is a huge and fast-growing market for smartphones and computer products, analysts say.

The Chinese mainland, Hong Kong and Taiwan compose Apple's second-largest market after the United States. China contributed 16 percent of Apples's revenues during its fiscal quarter ending September, growing almost three times from a year earlier.

But the California-based company only runs two authorized stores in Beijing and three in Shanghai.

Chinese fans and some analysts were also enraged by Apple's decision not to prioritize China in the new product launch.

The launch of the iPhone 4S in China was scheduled 91 days after its maiden launch in the U.S. market. The launch of the iPhone 4 was also 93 days late and the launch of the iPad2 was 56 days late.

"Many Apple products were made here and China is the largest overseas market for Apple. Why does the company always puts China on the third-batch or last-batch category in terms of new product launch?" asked Wu Shu, an IT company employee in Beijing.

"I feel Apple doesn't pay enough attention to the market of China."


Despite the complaints, Apple products remain immensely popular.

Having spotted this popularity, scalpers have spawned quickly in the past few years, typically buying up all iPhones and iPads from authorized stores as soon as a new product was launched, hoarding the products and resell them at much higher prices.

Smuggling and counterfeiting of the products also boomed.

Beijing's retailers said scalpers raised the black market price for a basic version of the iPhone 4S from about 5,100 yuan to 5,500 yuan on Friday as the products were sold out in all authorized stores within hours. Apple sold the new smartphone for 4,988 yuan on its own official website.

Bus-loads of migrant workers or students hired by scalpers arrived at Apple stores in Beijing and Shanghai from Thursday night, wearing armbands or caps with different colors representing different scalping groups.

"These hired helpers queue in line in 30-strong or 50-strong groups led by someone who holds a balloon," said popular photojournalist Li Feng in his blog. "It reminds me of scenes from a film about early 20th century revolution."

The helpers were paid 100 yuan each for queueing overnight, plus dinner, according to local media reports.

Security personnel estimated the number of hired helpers had topped 1,000 in front of Apple's Sanlitun store by Friday morning.

A salesperson at Apple's Xidan store said the company had limited the number of iPhone 4S handsets a person could buy and required ID registration from each buyer but could do nothing about the hired helpers.

Qiu Baochang, a lawyer with a Beijing customers' association, urged the government to regulate the market and crack down on rampant scalping that has disturbed the market order.

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