Video: Buying the iPhone 6 after sleeping in a garbage bag

Filmmaker Casey Neistat has produced another documentary short on waiting in line to buy an iPhone.

His latest, "iPhone 6 Lines and the Chinese Mafia," is shot outside several Apple Store locations in New York City. 

The film begins "19 hours and 6 minutes" before the Apple Store doors open Friday morning to sell the first iPhone 6 models. What we quickly discover is that the first person in line at the SoHo location is an elderly Chinese woman who apparently speaks little or no English. In fact, many of those in the Apple queues are Chinese.

Neistat brings a Mandarin interpreter with him to interview these shoppers. He didn't get very far. "Pretty much everyone said they were buying for themselves or buying for loved ones. Nobody would say they're reselling," says Aaron, the interpreter.

The film shows many of these same shoppers trying to stay warm through the night, sleeping in garbage bags or under cardboard, like the homeless. It's not a flattering portrait.

Later, New York City police show up and announce that it's illegal to sleep on the street and walk the line rousing people. An unexplained altercation with a Chinese woman in line results in her being handcuffed and lead off by police.

Finally, after the doors open Friday morning to the applause of Apple store employees – but no similar enthusiasm on the part of the queue sitters – two new phones are purchased by each Chinese shopper. Without a phone contract, the iPhone 6 sells for $600 each. Chinese shoppers pay in cash.

Neistat follows several iPhone 6 buyers as they leave, filming a second cash transaction nearby. The new iPhones are being resold to a middleman. 

What Neistat vividly captures is the iPhone resale market fueled by China. Due to regulatory problems, Apple lacks a key license needed to sell the iPhone 6 in China. Until the iPhone 6 is available to be sold in China, it will be sold at a premium in the grey market.

A similar phenomenon occurred in 2010 when the iPhone 4 was not yet available for sale in China. Chinese in the US and Australia then sold each new phone to local middlemen for $150 more than the purchase price. Later, the same phone was sold in China for more than $1,000.

As The New York Times reported in 2010:

An older Chinese man sitting on a stoop in the Sunset Park neighborhood of Brooklyn, who said he worked seven days a week as a cook, said the opportunity was too enticing for low-income immigrants to pass up.

“Many workers make a few dollars an hour working in restaurants or factories,” he said. “If they wait in line for an hour at the Apple store to buy and sell phones, they can make $300 in a single morning.” For many, he said, this is equivalent to an average week’s pay.

And Quartz notes that the gold iPhone 6 is now in high demand among resellers.

Dealers in Hong Kong expect to sell the gold 128 gigabyte iPhone 6 Plus for about HK$20,000 ($2,580), more than twice as much what it is selling for on the Apple website. They’ve sent staff to buy handsets of the new iPhone in Tokyo, where dozens of Chinese shoppers were lining up outside of Apple stores yesterday.

Welcome to Black Market Global Capitalism 101: Supply moving to meet demand.