5 things I learned about the mobile grey market in Mongkok

When I had a chance to visit Hong Kong last week, I made a quick stop in Mongkok (as per suggestion by M.I.C. Gadget) to take a peek at the latest in the cell phone grey market. While there, I picked up a few things about how the ecosystem functions:

1. Just like when you purchase anything online, don’t go with the first offer you find. Shop around. I found the white iPhone 4 I was looking for at the first store I checked. It was selling for $6880 HKD (~$885 USD). But the more I’d asked around (deeper in the Sin Tat Plaza) the cheaper the prices I found. This makes obvious sense, because the stores at the front pay a higher leasing premium than the stores in the back.
2. Shops spend upwards of $1.5 million HKD to purchase a spot in Sin Tat Plaza. The store I purchased my white iPhone 4 from was a tiny spot no bigger than 30 sq. ft. in the back corner of the plaza and it cost the owner $1.5 million HKD (~$200,000 USD) to start up. Shops in the front or with more space evidently cost much more.
3. Leasing the spot costs upwards of $66,000 HKD to rent. The store owner I mentioned before pays $66,000 HKD (~$8600 USD) per month to rent his spot.
4. Shops make ~$100 HKD on each cell phone they sell. Take this one with a grain of salt, but on average every cell phone sale made in store only nets the shop ~$100 HKD (~$13 USD). Margins will increase with lower priced items like cases and screen protectors, as they can be purchased in mass quantities at much lower costs by the stores. But according to these figures, shops need to sell over 22 items per day just to break even (not including employee salaries or other overhead).
5. To make ends meet, shops will resell items in mass quantities to other resellers. When I was purchasing my iPhone 4, the store owner pointed out a huge stack of at least 20-30 iPad 2’s being marked for shipment to resellers in China.
   

Mongkok’s mobile grey market very interesting place housing a blend of official and KIRF products. It was my initial thought that these shop owners try to swindle you out of your money. In reality, they’re very up front with you about their merchandise as long as you know to ask the right questions. I highly recommend being able to speak to the retailer in their native tongue. Too much information can be lost in translation when dealing with electronic goods and services, which usually winds up breeding contempt. That being said, always do your research before purchasing a product from these types of areas. Know what to look for to verify the product that you’re buying is the product that you want.

Note: The figures in 2, 3 and 4 were taken from a conversation I had with the owner at the shop I purchased my iPhone 4 from.

Airplane Wing Flexibility

Back in 2008, Boeing published a video of an isolated 50-foot section of a 787 wing being flexed to the point of failure. In the test, the wings were flexed upward of 25 feet (~150% of the maximum expected forces during normal operation). On a recent trip to Taiwan I happened to sit in perfect view of the entire left wing span of the 747 we were flying aboard, so I decided to take a look and see just how much the wings actually flexed during ‘normal operation’.

While taxing to the runway, the wing was near completely flat. Looking at how large the turbojet engines are, you must think about how much constant stress the wing is under.

In the air, the wing rose some 7-12 feet (based on visual estimation). It seems the highest point of flex occurs between the wingtip and left-most engine.

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Interestingly back on land as the plane taxied to the gate, the wing actually appeared to be a little higher than it was prior to flight. Even accounting for the different camera angles, the angle of that last flex point is apparent.