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Low markups in Beijing's gray market suggest lower Chinese demand for Apple's iPhone X

Gray market iPhone X dealers in Beijing are reportedly charging much smaller premiums for the iPhone X than they did for last year's iPhone 7 Plus, allegedly reflecting lower Chinese demand in general.




Resellers were charging up to 29 percent for the 256-gigabyte iPhone X at last week's launch, versus 163 percent for the jet black version of the iPhone 7 Plus in 2016, according to JL Warren Capital research cited by Bloomberg. At a city electronics market, the X markup was just 15 percent.

The main issue is believed to be price. Before any markup, a 64-gigabyte iPhone X is 8,388 yuan in China, or about $1,264. Choosing 256 gigabytes ramps the cost up to 9,688 yuan, or $1,459. The phone can easily cost as much or more than someone's monthly salary.

Premiums are liable to shrink even further in coming months as Apple's supply begins to catch up to demand, eventually making it pointless for a shopper to turn to the gray market to beat shipping delays. In the U.S., online orders are currently shipping in three to four weeks.

Another compounding factor is the availability of comparable but cheaper Android phones from domestic firms like Huawei and Oppo. Apple remains in fifth in the Chinese smartphone market, despite a boost from September's launch of the iPhone 8 and 8 Plus.