Hong Kong no longer sells the cheapest iPhone units

Hong Kong, China (4E) – Hong Kong is known for selling iPhones at the cheapest prices possible. Hong Kong sold contract-free iPhone 4S units for $656 when it first came out.

It was the cheapest offering of the iPhone 4S in the world at the time. But that has all changed with the shipping of the iPhone 5 three weeks from now.

Now, an unlocked iPhone 5 will retail for around $721 in Hong Kong — $72 more than what the United States is planning to offer for an unlocked iPhone 5.

Apple products, specifically iPhones, were cheaper in Hong Kong because there was no need to pay consumption taxes, unlike in the United States where most of the states in the country charged tax for purchases.

Because of Hong Kong’s cheap Apple prices, it has become a destination for smugglers. Smugglers buy cheap iPhone units in Hong Kong and sell it in China. In China, the iPhone 5 will retail for $792, still more than what’s going to be offered in Hong Kong.

In China, smugglers can sell the iPhone 5 20 percent more because of various taxes. The imposed price hike of the iPhone 5 in Hong Kong is seen as a strategic move to keep prices competitive in the Asian region.

The country that will benefit the most from the raised price tag of the iPhone 5 in Hong Kong is the United States because it will sell it cheaper.

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