In China, Even Genius Bar Reservations Are Gold

July 29, 2013

Even if residents of China don’t know Benjamin Franklin, they know his quote: “Time is money,” and they know how to generate revenue from its lesson. In this case, entrepreneurs are making bulk, on-line Genius Bar reservations for the country’s eight Apple stores, and then selling them at a profit to individuals desperate for a product repair or swap-out. Based on the price of reservations, the black marketeers could be earning $2,000 a day just for iPhone reservations at Beijing stores. According to China News, a key element of the profit-making operation is that Apple store employees don’t verify the identify of the person appearing for the reservations. But the scheme really relies on the scarcity of Genius Bar reservations at many Apple stores outside the United States—there a few reliable repair alternatives in those countries and no other sources for the full-out warranty swaps that Genius Bars provide. As a result, it’s nearly impossible to book a Genius Bar reservation within the one-week window provided by Apple. That’s where China’s entrepreneurs have stepped in—again. During previous iPhone releases in China, scalpers bought up hundreds of iPhones and sold them at a profit until Apple revised its sales procedures to block the scheme. In this latest case, a reporter for the newspaper investigated the current reservation drought, and quickly found a source selling next-day reservations for both the Xidan Joy City and Wangfujing Apple stores. Typically, the reservations sell for $1.60 to $6.50 each. When the reporter arrived at the store the next day for his reservation, he learned the handling Genius did not verify his name or reserving email address. The reporter mentioned the source of his reservation, and the Genius recommended against using the black market. However, none of the customers arriving at the Genius Bar was turned away because of the source of their reservation.

During previous iPhone releases in China, product scalping and line stand-ins were rampant at the Apple stores. Teams of buyers would pay people to stand in line and purchase multiple iPhones. The stand-in would be paid a small fee, and the buyers would then either immediately sell the iPhone to ordinary customers arriving at the store to buy an iPhone, or they would ship them to other countries. Either way, the buyers would sell the iPhones at an inflated price to make a profit. Apple dampened the scheme when it began requiring on-line reservations for iPhone purchases, and for buyers to produce ID when they arrived at the store that matched the on-line purchase reservation.

Next-day Genius Bar reservations in the United States are generally not as difficult to make for iPhone issues. For example, at the time this story was written, there were 447 open reservations at the Fifth Avenue (NYC) store over the next four days. Only the 32-slot Tuesday “morning” time period was unavailable. There were from 16 to 42 reservations open in the other time periods: early morning, afternoon and evening. A smaller, more isolated store—Summit Sierra (Reno, Nev.)—also had several open reservations in all time periods over the next four days.

Macintosh-related Genius Bar reservations are generally more difficult to make because there are slightly fewer available slots. However, even at Fifth Avenue there were open slots in all time periods when this story was posted. Summit Sierra also had available Mac time slots for all periods of the next four days.

Based on the average asking price of the black market reservations and a conservative number of available slots at just the three Beijing stores (168), the black marketeers are earning at least $2,000 a day just for clicking on a computer screen.

Update: Within a week, a Beijing resident reports that it is possible to make Genius Bar reservations on-line and by telephone directly to the store. Eric Jou acknowledges scalpers at the Sanlitun (Beijing) store selling reservations for $32 each. He provided several screen shots of completed reservations, in contrast to the screenshot below.

This screen from the Xidan Joy City Apple store Genius Bar Concierge system shows there are absolutely no reservations available. Typically, clicking on the right arrow would take you to the next four days of reservations. In this case, the arrow isn’t even clickable.

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