iPhone 5 arrival triggers new sales frenzy

It took little more than five hours for the first Apple iPhone 5 to go on sale in the Chinese mainland after being smuggled across the border from Hong Kong, but supplies were short and prices high.

In a crowded building in the southern city of Shenzhen, which lies across Hong Kong's northern border, a salesman stood by as shoppers speaking various dialects scrambled to take photos of three shiny new iPhones on display in his glass cabinet.

"The stock is so limited that people are treating them like gems," said another salesman, surnamed Lin.

New Apple products are typically rolled out in the Chinese mainland after they are in Hong Kong, creating a thriving "gray market" for enterprising traders. According to local media reports, iPhone 5 is expected go on sale in the Chinese mainland by year end.

Vendors like Lin make a year-round living exploiting the lower prices of Apple products and other popular brands in Hong Kong, a free port whose downtown is just an hour from Shenzhen with no duty on many electronics imports.

At the iPhone 5's debut in Hong Kong earlier in the day, small groups of people carrying rucksacks filled with cash waited outside the city's flagship store hoping to snap up phones for resale.

For those able to secure one, the new phone cost HK$5,588 ($720), or about 4,546 yuan, at the Hong Kong Apple store, while they were selling for between 7,500 yuan and 9,000 yuan in Shenzhen where fake and smuggled phones are often hawked.

But in Shenzhen, business was slow.

On Friday afternoon, most vendors in the Shenzhen building still had their stalls filled with the iPhone 4S, promising that the latest model would arrive in the evening, when potential buyers were hoping to get a better deal.

In Hong Kong, the iPhone 5's Friday debut stoked up the Apple craze again, with thousands of fans jamming stores, scalpers scouting for buyers, and telecommunications operators jumping on the bandwagon by soft-launching new services.

The new smartphone is also launched in the United States, the United Kingdom, Canada, France, Germany, Australia and Singapore.

In Sydney, Singapore and Tokyo, iPhone 5 fans waited hours outside Apple stores or authorized dealers to get the latest model.

In Hong Kong, buyers had to sign up online with Apple to pick up the new model in the local flagship store at a prearranged time. The first customers in Hong Kong were greeted by staff cheering, clapping, and chanting "IPhone 5! IPhone 5!" and high-fiving them as they were escorted, one by one, through the front door.