The New York Times this week, reported Chinese men and women regularly queuing outside New York Apple Stores to buy iPhones to send to China.
"People wait in line at an Apple store buy the newest iPhone for $600, paying a premium to skip the AT&T contract," writes Nick Bilton.
"They then sell the phones to middlemen, usually at electronics stores in Chinatown, for about $750." Those who queue to buy the phones, can make as much as $300 in one morning.
Despite many living in poverty or on low wages, the latest iPhone 4 can then fetch as much as $1,000 once the phones have been unlocked.
The irony, as Bilton points out, is that the iPhone is actually manufactured in China, but then makes the long journey back to be sold on to those eager to have the latest gadgets. Phones are smuggled back to China, often taped to bodies, or hidden in shipping containers with other goods.
Apple's decision to offer the iPhone 4 in China officially should put an end to the trade, and reportedly the price of smuggled phones has already dropped in anticipation.
It should also end accusations of racism from some Apple Store staff who have been accused of overly quizzing Asian customers, with some being told they could not buy the iPhone 4.
"I don't deny that there is a serious concern that Apple has," Grace Meng, a New York State assemblywoman told the newspaper. "We just want to make sure that no one is singled out because of their ethnicity or because they don't speak perfect English."
In China on Saturday, the iPhone 4 will sell for CNY 4,999 (£472/$744) for the 16GB model and CNY 5,999 for the 32GB model (£575/$893). Apple is also opening the Apple Store Hong Kong Plaza in Shanghai and the Apple Store Xidan Joy City in Beijing opening on the same day.
This story, "iPhone 4 China Launch May Zap Grey Market" was originally published by Macworld U.K..