Apple tightened its product return policy in Hong Kong to crack down on the illegal trade of iPhones from the territory into the mainland.
In a move apparently designed to protect sales of its latest model, which is tipped to launch in September, the US-based company announced it will only exchange defective devices in Hong Kong moving forward. Previously, products could be returned or exchanged within 14 days of purchase, regardless of whether the devices were flawed or not.
The change aims to cut down on the practice of Hong Kong buyers reselling the latest iPhone models in the mainland, either directly to tourists or by smuggling, where the devices sell for a premium. There is typically a surge in such activity following the launch of a new iPhone model, Bloomberg reported.
Apple’s new policy is presumably designed to deter the return of devices which go unsold through such non-traditional channels.
Hong Kong’s lower taxes provide a strong incentive for enterprising individuals to make a tidy profit on the price gap between the city and the mainland, Bloomberg reported.
The iPhone 7 Plus with 32GB of memory is priced at HKD6,588 ($843) on the Hong Kong store, while the same model on the China website goes for CNY6,388 ($958). The 256GB models are HKD8,288 and CNY7,988.
Apple’s returns policy change is not the vendor’s first attempt to protect sales of its latest smartphone. Before the launch of the iPhone 7 in 2016, Apple began charging for returns of iPhone and Beats devices, South China Morning Post reported.
In early August, the smartphone giant announced revenue in greater China dropped 10 per cent year-on-year in its fiscal Q3, which covers the three months to 1 July. Apple CEO Tim Cook said sales in the mainland were flat year-on-year, with Hong Kong continuing to drag down its overall China performance.
Apple’s share of the greater China smartphone market, which also covers Taiwan, fell to 9 per cent in the January-June period from a peak of 14 per cent in the first half of 2015, according to Counterpoint Research.