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Scalpers Spur Apple To Require Reservations For iPhone 119

Posted by timothy
from the cash-on-the-table dept.
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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Scalpers Spur Apple To Require Reservations For iPhone

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  • 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: (Score:1, Insightful)

      by Anonymous Coward

      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 abo

      • Re:Apple advise (Score:5, Insightful)

        by ardeez (1614603) on Sunday October 10, 2010 @10:36AM (#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: (Score:1, Troll)

          by Dogtanian (588974)

          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 "evi

        • Re: (Score:2, Insightful)

          by PopeRatzo (965947) *

          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?

          • by vux984 (928602)

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

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

            • by PopeRatzo (965947) *

              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 relativ

              • 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.

                • by PopeRatzo (965947) *

                  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"?

                  • 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"?

                    No. Somebody saw something on a webpage, and it spread - are you new to the internet? Probably, else you would be able to find the press release - unless of course there is none. Which means you are wrong and can't admit it.

                  • by mattack2 (1165421)

                    Umm, that article doesn't mention ANYTHING about a "press release".

                    Also, that site is a rumors site. I have no info whether this is true or not, but rumors sites have posted plenty of false info in the past.

              • Re: (Score:3, Insightful)

                by vux984 (928602)

                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 you

                • by PopeRatzo (965947) *

                  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

                  • by pipedwho (1174327)

                    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 n

                  • Re: (Score:3, Insightful)

                    by vux984 (928602)

                    I'm sorry, but in what way are the people who are "swooping in and buying them" not customers?

                    Who cares exactly what you classify them as?

                    a) They don't benefit Apple by increasing sales. (Given there is a shortage, 100% of the product will move regardless.) They don't represent additional demand. They don't actually want the product except to resell it. Zero sum game.

                    b) They hurt apple by pissing of many potential customers who see the phones they wanted to use being marked up 100% right in front of their e

                    • by PopeRatzo (965947) *

                      just as soon as they get enough out there.

                      And you believe that Apple can not get "enough out there"?

                      In breaking news, Apple will be limiting the lumps of coal you can purchase in Newcastle and bags of ice in Nome.

                    • by vux984 (928602)

                      And you believe that Apple can not get "enough out there"?

                      I have no reason not to.

                      I will concede that Apple may have made a series of business decisions that they should have known would lead to their being a shortage... launching in a major market without enough product in the warehouses, and not enough suppliers of crucial components (such as the display) to ramp up production quick....

                      But that doesn't make the shortage less real.

                      Demand exceeds supply, and there is nothing apple can do to satisfy that dem

                  • by mattack2 (1165421)

                    I'm sorry, but in what way are the people who are "swooping in and buying them" not customers?

                    Do you say the same thing about ticket scalpers?

                    (Personally, I think ticket scalpers are an example of the free market... There are already measures like this, and laws preventing scalping on premises, to fight against ticket scalping.)

  • by penguinchris (1020961) <penguinchris.gmail@com> on Sunday October 10, 2010 @09:51AM (#33851886) Homepage

    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).

  • 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.
    • by hedwards (940851)
      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? (Score:5, Insightful)

    by Ichijo (607641) on Sunday October 10, 2010 @10:10AM (#33851974) Homepage Journal

    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: (Score:1, Interesting)

      by Anonymous Coward

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

    • Re: (Score:3, Insightful)

      by antifoidulus (807088)
      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 mor
    • Re:iBay? (Score:5, Insightful)

      by phantomfive (622387) on Sunday October 10, 2010 @01:19PM (#33853340) Journal
      Scalpers create or contribute to the shortage. That, and not every company is out to gouge their customer to the maximum amount possible.
      • Re: (Score:1, Troll)

        by ZDRuX (1010435)

        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? (Score:4, Insightful)

          by phantomfive (622387) on Sunday October 10, 2010 @07:14PM (#33855390) Journal
          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.
      • The only way scalpers would create/contribute to a shortage would be if they held their inventory back from "their" customers. Of course hoarding inventory wouldn't make much sense since they want to make money. These folks are simply taking advantage of a relative scarcity to extract the extra money Apple should be charging to balance the supply and demand of the present market.
    • 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 scal

  • Scalpers? (Score:2, Interesting)

    by beaker8000 (1815376)
    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? (Score:5, Insightful)

      by Dynedain (141758) <slashdot2@@@anthonymclin...com> on Sunday October 10, 2010 @11:45AM (#33852632) Homepage

      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.

      • by daethon (1349241)
        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.
      • 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 hav
        • Re:Scalpers? (Score:4, Insightful)

          by BasilBrush (643681) on Sunday October 10, 2010 @01:18PM (#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: (Score:1, Interesting)

            by beaker8000 (1815376)
            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, perfect
            • Re: (Score:3, Interesting)

              by BasilBrush (643681)

              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. E

              • 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.
                • by pipedwho (1174327)

                  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 co

                • OK, I guessed your support of scalpers came from some personal experience. I could change my point to people buying viagra from spammer don't think there's anything wrong with spammers, but the rest of us...

                  But the more fun analogy that comes to mind is the kid who was given a lollypop by Ronnie Kray and spent the rest of his life saying the Kray Twins were just misunderstood.
                  http://en.wikipedia.org/wiki/Ronnie_Kray [wikipedia.org]

                  I once arrived at a concert without a ticket, thinking there would be tickets available on th

        • Re: (Score:3, Interesting)

          by UnknowingFool (672806)

          (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 i

          • 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 t
            • 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.

              • 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 the
      • by Macdude (23507)

        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.

        • 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

        • 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....

      • by Mana Mana (16072)

        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 [redundant, ed.]. Think tickets for concerts, or the shortages of Wiis and PS3s when those first released.

        That would be a rare animal---a.k.a., super-efficient scalper maximus, or Ticketmaster. They're in a league of their own.

        Before you flippantly retort, I said, they're in a league of their own. Contrast your example as an etude.

        Apropos, let's not exaggerator the effect of these zhonguo ren scalpers.

  • 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: (Score:1, Informative)

      by Anonymous Coward
      China has had "scalpers" before the USA (or the UK for that matter) was even founded.
    • Re: (Score:3, Interesting)

      by hedwards (940851)
      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.
  • by Animats (122034) on Sunday October 10, 2010 @10:53AM (#33852266) Homepage

    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: (Score:2, Informative)

      by Anonymous Coward

      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 % m

    • Re: (Score:3, Interesting)

      by uglyduckling (103926)
      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? (Score:1, Insightful)

    by ILuvRamen (1026668)
    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: (Score:3, Interesting)

      by VendettaMF (629699)

      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.

  • by Guppy (12314) on Sunday October 10, 2010 @11:41AM (#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!

  • Logo (Score:1, Insightful)

    by Anonymous Coward

    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.

If it's worth hacking on well, it's worth hacking on for money.

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