updated 09:40 am EST, Thu November 15, 2012
Group smuggled in up to 160,000 devices, including iPhones and iPads
A trial has begun this week in southern China for a smuggling ring alleged to have brought in as many as 160,000 devices, including iPhones and iPads. The goods are said to have been worth as much as RMB 500 million (about $80 million US), and resulted in the loss of about RMB 55 million ($8.7 million) in taxes. Before their arrest the group sold products through Alibaba's Taobao online marketplace, and at one point were estimated to be selling up to 20,000 Apple items per month.
The sting required the cooperation of officials in the mainland and Hong Kong, and actually dismantled five different smuggling rings, including 104 suspects; this week's trial -- which began yesterday at the Shenzhen Intermediate People’s Court -- is only dealing with the first 25 suspects. Most defendants are said to have plead guilty, although some challenged the amount they were charged with, or their role in the smuggling operation. The Southern Metropolis Daily describes a diverse ensemble including "stylish young men," housewives, and one person over 70 years old.
Smuggling of Apple devices has long been a problem for the company, the Chinese government and other parties. Apple products are typically cheaper outside of mainland China, and Hong Kong iPhones are often unlocked, making it possible for people to use them with China Mobile, the world's biggest cellphone carrier. Mobile isn't an official iPhone vendor, but is thought to have many unlocked iPhones operating on its network. Earlier this week Hong Kong customs is said to have busted a smuggling shipment with 227 iPhone 5s, 22 iPads, 308 older cellphones and 1,514 LCD monitors.