Interview with a Chinese iPad smuggler

today was iPad day in Hong Kong, and we were just about 100 feet and 1 floor up from one of the largest resellers of iPads (with the longest lines) in the entire city. Something just didn’t seem right. [caption id="attachment_3083" align="alignright" width="276" caption="Photo from"][/caption] One of the men looked up quickly when a gaggle of teenage girls cautiously turned the corner. They gave a quick nod over toward him and he jumped up immediately. He walked over and they handed over plastic shopping bags with large Apple logos on the side–two bags per girl, along with the receipts. In exchange each girl got $100HK (about $12 US) per bag. The girls promptly blended into the crowd of other shoppers and the man was busy stuffing boxes into his luggage. He then rolled his suitcase back to the Starbucks where it was stacked with other luggage, looking quite like a traveller ready to go on a journey. “Dude” I whispered to my friend. “These guys are iPad smugglers.” We had seen the mules in the line. Folks wearing masks, sunglasses and hats who were very shy when it came time for photos. People kept turning around, hiding under newspapers, even opening umbrellas to shield us from our cameras. The Bloomberg reporter told me “those kids are Triad members (Chinese mafia) who will be selling their iPads later today in Mongkok”. With that bit of warning we were both a bit hesitant to talk to the guys in the Starbucks, fearing they may be the ringleaders of some violent Ax Gang from a hard life council flat in rundown Kowloon. “I wonder if they could get me an iPhone 4” I thought to myself. The man came back from the girls with eight bags filled with iPads. His partner pulled out a legal tablet and made some check marks. The page was filled with dozens of check marks. 16gb, check, 32 gb, check, 32gb 3G, check, check. Of course, looking over to our table was probably just as confusing for the two smugglers. We were frantically busy uploading video of the iPad launch to Youtube and had two Mac laptops, a mifi, an iPhone 3G, a Sony HD Camcorder, a Canon Digital SLR and a dried out danish. They noticed us noticing them or we noticed them noticing us (I can’t remember which came first) and finally I just had to break the ice. “Do you like the iPhone 4” I said with a smile, sliding over to get a better look. “Yeah, it’s great” he said with barely a hint of an accent. “The screen is great”. So we started chatting about the phone and the screen and whatnot. He got it in China he said, but it was originally from the UK. I finally got around to the meat of the matter and said “pretty crazy day” pointing over to the reseller nearby. “Yea, I’m going to be here for hours” “Getting an iPad for your friends?” “More than a few friends. I have $2 million RMB I have to spend today (about $300,000 US). My boss sent me down here and we’ve got dozens of people in line. There are five other guys in other parts of Hong Kong doing the same thing.” “Good business I guess”. “Yea, but it’s not our main business. We have a factory in China making (this and that). That’s our core business, it’s just this opportunity arose and the boss wanted to take advantage of it. It’s much cheaper for us to get the iPads here in Hong Kong than flying over to the USA and bringing them back.” “Are those people in line friends of yours?” [caption id="attachment_3084" align="alignleft" width="300" caption="Photo from"][/caption] “No, we hired a ‘hat gang’. One guy is the top hat and he goes out and recruits all the kids. We pay them $100HK per iPad, and some of the kids will go to another store later today to get in line again. Better than them doing nothing all Summer just goofing around.” Just then a runner came down, a skinny kid in a crooked oversized baseball hat, and reported to the other man some news. After he left I returned to our conversation. “Was that the ‘top hat’?” I asked. “Ha,” he said. “The top hat is VERY big and watching the kids closely.” Each kid was holding essentially $10,000 HK in cash ($1,200 USA) so the top hat was to make sure the kids didn’t get any funny ideas. “How are you going to get these into China?” where the tax rate is about 20% on imported items like this. “Not my problem” he laughed with an expression that said ‘thank god’. “I’m to take these to a shipper in Hong Kong later today and he will deal with that. You know China–a bit of money to the right person can open up a channel” he said. “Only about 50% will go to China. The other 50% will go to folks in Hong Kong who couldn’t be bothered to wait in a line.” “I actually have two cars down in the parking garage right now.” he said. “When the first is full it will head over and I’ll take the second one later tonight. I think I’m going to be here for five hours or so.” “All your men are at one store. Why don’t you use the other store (which had significantly shorter lines) just around the corner” “That store opens the box before they sell it to you, ripping the plastic and making the iPad less valuable on the resale market”. His phone rang and he hurried to answer it. After a few words in Chinese he hung up and turned back to us. “The order has changed. Originally it was the 16gb wifi–the cheapest one that we were supposed to focus on, but now the boss says get whatever we can. I guess it’s selling out pretty well all over Hong Kong.” He then turned to his friend who had to communicate the order back to the gang leaders and their underlings still in the line. We got up and said our goodbyes. It was a pretty fascinating look at the process of smuggling, from the outsourcing of the lower end jobs (line sitters) to the handoff of the significant risk (the cross-border entry). With a markup of about 100% for the street price in China, this guy was going to bring in about $200,000 US in profits for just a couple days work sitting in a Starbucks. Maybe we’ll see him again on Friday when the iPhone 4 goes on sale. Here is the video shot showing many of the mules who were waiting in line. ]]>

Private Thomas D. Costello, laid to rest in Arlington after 91 years in the French countryside

World War I doughboy who was fell in action but was listed as MIA for the last nine decades. Private Thomas D. Costello of New York City was killed in action in France near a place called Bois de Bonvaux. His remains were located by a private MIA foundation who searches in France for the missing. As chance would have it, when they found the remains there was an official US government MIA team in the area looking for a missing in action soldier from a World War II tank engagement, so they were able to bring their high tech sensors and skills into recovering Private Costello. His descendants attended the funeral, though they did not even know the story of him being missing. Said his relative (Frisbie):

…had no idea he was a relative until he was contacted about two years ago by a Pentagon genealogist, said he believes that Costello was his great-great uncle. But the distance of the connection “doesn’t matter,” Frisbie said. “He’s a fallen soldier, and if I can honor him, that’s great.”
The French embassy also sent their military attache to attend the funeral and say thank you on behalf of the French people. You can see the video below. The US spends nearly $105 million a year on finding missing troops. The CNN article on this story also has some interesting quotes from the family.]]>

Smallest USB drive, that I own

USB drives to me are kind of silly. I have been living in the cloud when it comes to data for a number of years now and regard USB keys as sort of a throwback to the era of ‘physical media’ when you had to burn something to a disk to transfer it from one party to another. However, due to some business demands, I’ve recently had to go USB drive shopping to pass along about 10 gb of data (that could and should be done server-to-server but that’s another story). So I went down to Wanchai today to look at drives. I managed to find this little 16gb TDK drive buried in the depths of the computer center. I originally wanted a 32gb drive but then priced out two of these 16gb drives at less than the cost of one 32gb drive. The guys I bought from, who have cut me 10-15% discounts on other items before were able to offer me a wopping $3HK discount per each drive (which is about $0.36 US). Oh well. Anyway, take a look at this next to some random items on my desk. The drive is currently being loaded with a number of database files and other documents for a pending transfer in the next 48 hours (provided my contact meets up on time). Too bad it’s not shaped like a button or a cufflink–that would give the whole transfer a modicum of coolness a la James Bond. Not sold in the US just yet but available throughout Hong Kong and Japan.]]>

PenguinSix's Tweets for the Week

  • Off to the Museum of Coastal Defence to learn about pirates. #
  • Interesting comparison by @Scobleizer between iPhone 4 camera and Cannon 5-D MK II. #
  • @chilishrimpgirl @coffeemeow That stuff happens all the time in Ikea Beijing. Good write up of the Ikea loungers here: in reply to chilishrimpgirl #
  • @ThomasCrampton iPhone 4 e.t.a. of July 28 in Hong Kong so not that much longer. in reply to ThomasCrampton #
  • @raykwong They're making a comedy movie about all the sex shops in China. Trailer here: in reply to raykwong #
  • Photos from the Shanghai Apple store opening. #
  • Rumors of Hong Kong iPhone release on July 28 and iPad on July 19. Now if we can just get some new Mac Pros this month… #
  • Chinese airport UFO pictures released: #
  • @ganglu First 5,000 get a free t-shirt. in reply to ganglu #
  • @hypercasey Any idea if pre-orders will be accepted before July 28? in reply to hypercasey #
  • My massive site wide maintenance script has checked 80,000 of my pages in 14 hours. 4.4 million pages to go. Sigh. Time to recode this. #
  • I liked a YouTube video — a bunch of low flying passes #
  • Spy swap takes place on an airport runway. Was so much more intense on a foggy night on a Berlin bridge. #
  • Northern Ireland police send 20 armored cars to the England to help find cop-hunting shooter. Snipers also deployed. #
  • @kevinshe Looks like he jumps out of a porta-potty at the beginning. in reply to kevinshe #
  • 3HK just told me it will take 48 hours for an online SIM card recharge to take effect. I know who I'm not buying an iPhone 4 from. #fail #
  • More melamine found in Chinese milk products…again. Wonder if Baidu will advertise fake doctors again. #
  • @hypercasey I was just across the street at white stag. Popped over but you had left. Oh well in reply to hypercasey #
  • $18800 for iPhone 4 in Wan Chai. That's a bit silly. #
  • Here's a novel idea for my day–actually doing some work. Deep into a perl script–no time for lunch or twitter. #
  • I liked a YouTube video — So I Married An Axe Murderer(colonel sanders scene) #
  • Feel like Udon in Causeway Bay or Wanchai. Now if I can just find a decent place. #
  • @SelfishMom Follow @FDNYnews, @theBravest, and @NotifyNYC for all your NYFD needs… in reply to SelfishMom #
  • I liked a YouTube video — Anthony Rother meets Loveparade – The Art of Love #
  • I liked a YouTube video — Eric Prydz – Pjanoo #
  • One way to get the message out. Chinese authorities hang banners in mall announcing the execution of corrupt official #
  • @AndreaPlunkett Consider your ignorance of LeBron James to be a gift. If you knew what was going on, you'd probably be throwing up now. in reply to AndreaPlunkett #
  • German sport fans demand public lynching of the World Cup winner picking octopus for choosing Spain over Germany. #
  • @hypercasey Those Shanghai Apple shirts look they have a Stargate on the back. Be careful wearing one. You might end up somewhere else. in reply to hypercasey #
  • People evacuated Oakland in anticipation of the BART shooting verdict. #
  • Samim — Heater. Because you can never have enough techno accordion. #
  • Preaching to the glue-sniffing, barrio street gangsters of Mexico City, a new 'Saint' tries an unorthodox approach. #
  • The iPhone rebuttal to the viral HTC "is all that" cartoon. Classic and funny. #
  • US Cyber Command hides code in their official logo. Can you crack it? 9ec4c12949a4f31474f299058ce2b22a #
  • @johnstauffer When you settle on a couple properties or areas, consider, an HK messageboard for advice on neighborhoods. in reply to johnstauffer #
  • Battling yet another Rackspace cloud attack on my database. Who's to blame this time, WordPress or phpmyadmin. I don't know… #
  • I hate WordPress script kiddies… #
  • @johnstauffer This is actually a pretty good house hunting site too for Hong Kong. in reply to johnstauffer #
  • @Tortue Tiesto is not dead. It's 2006 rumor dredged up. Here is the original story from 4 years ago. in reply to Tortue #
  • @Tortue Tiesto's tour dates have him in Europe this week and the story I just read said he died in California, in reply to Tortue #
  • Chilling video of a baseball fan falling from upper deck chasing foul ball. You don't see the fall, thankfully. #
  • Nordic cuisine profiled in the NY Times. Eat like a Viking. #
  • Survived the cabbie's round of Collapse or whatever. Should have thought twice about entering a cab with 4 mobiles on the dash. #
  • Video game done. Now he is reading the horse racing forum in the paper. A more traditional distraction. #
  • My cabbie is playing a video game on his phone while we drive. Is this my last tweet ever? #
  • @thekenyeung Totally agree. This is just ridiculous. A 1-hour special? The NBA is like professional wrestling now. in reply to thekenyeung #
  • @johnerik Rent a Ferrari and take it out for a 180mph test spin in the desert. in reply to johnerik #
  • Understanding all the bits of HDBaseT. You'll need to know this eventually. #
  • FFS…"LeBron James will announce the team with which he will sign during a one-hour special on ESPN Thursday night." #
  • Tremendous advances made in Narco-Submarine technology. 100ft coke smuggling sub nabbed in Ecuador. #
  • The 'one' museum of imperial Chinese artifacts, in two locations (China & Taiwan), dodging battling armies on the way. #
  • Newly released documents show extent of Nixon/Kissinger psyops campaign against N.Vietnam (and it's failure). #
  • @SelfishMom Are you in a Prius? in reply to SelfishMom #
  • Yet another dancing soldiers has gone viral. #
  • How hip is Hong Kong? #
  • @johnerik how many words do you need to know? Abandon ship is probably the only really important one. in reply to johnerik #
  • RT @mostlylisa: There are no gear limitations to great photography. See: iPhone Fashion Shoot (via @fstoppers) #
  • Shanghai standup comedian pushing the envelope of censors, albeit in a dialect most Chinese don't understand. #
  • @christinelu The Hau Tree lanai is a famous place for kamaaina and tourist. Robert Louis Stevenson used to write there. in reply to christinelu #
  • Another Tuesday. Will Apple drop a new Mac Pro or iMac on us today? Please? We need new toys here. #
  • Worst downturn in stocks for 300 years? New York Times profiles the Elliot Wave and the epic downturn yet to come. #
  • @hypercasey I had similar w/ a Mac Pro. Card worked, fan didn't. So passed tests fine, but then overheated and shutdown. 2 weeks to sort. in reply to hypercasey #
  • 125 years of cricket, in New York City. Grudge match finally held after nearly a century wait. #
  • iPhone / iPad app development infrastructure and support growing. #
  • Why $10 is the new "magic number" for digital media content. #
  • @jonbuford What day is the meetup? in reply to jonbuford #
  • Some humans + fireworks = stupidity. #
  • American geologist gets 8 years in a Chinese jail for selling 'secret' that wasn't secret until after it sold #
  • First day of kindergarten for my 4-year-old. Two kids had Harvard t-shirts on. Very sad. Let children be children…. #
  • @Tortue Probably to keep mainlanders from stashing their money in Taiwan via real estate (as they are doing in HK). in reply to Tortue #
  • Hot dog Chaos in NY. "Let him eat! Let him eat!" the crowd chanted as police arrested the ex-hot dog champ Kobayashi. #
  • One more month until "Norwegian Ninja" opens at the box office, in Norway. No idea when it will hit HK. #
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    Buying a Chumby or Sony Dash in Hong Kong = No Joy

    You would think that a place like Hong Kong, which is only miles from the gadget factories in Shenzhen and benefiting greatly from a massive demand for consumer appliances and essentially no customs duties on imports, would have the latest and greatest devices from around the world easily available at the various Computer (grey) markets around town. But yesterday I plodded through one of them with stares of disbelief and wonder, and not just because I was speaking English and showing them pictures on my iPad. The Chumby and the Sony Dash (which has the guts of a Chumby inside) are two Internet appliances that I couldn’t find in Hong Kong.  Both are in heavy use in the US, with the Chumby being out for several YEARS now.  Chumby is now expanding into multiple devices.   But try as I might, I couldn’t find one in Hong Kong. Part of the reason might be usage–most people in Hong Kong are on mobile devices and the thought of a stand alone, sit at home (in your small house) Internet appliance isn’t that appealing.  I’ll confess that after having my iPhone next to my bed for a few weeks, I rarely used my Chumby for anything besides an alarm clock. But now that I’m stuck with no iPhone pending the release of the iPhone 4 and no FM radio since we left all of those back in the States, I’m in the market for another Internet device to help soothe my younger son to sleep every night with classical music from Venice, Italy (a station we use because they have no annoying commercials).  Unfortunately, these were two gadgets I just couldn’t find anywhere despite looking pretty hard. Perhaps there’s a business opportunity here…hmmm…