iPhone 4S chaos in Hong Kong by Philip Elmer-DeWitt @FortuneMagazine November 11, 2011, 11:41 AM EST E-mail Tweet Facebook Google Plus Linkedin Share icons Thousands left empty-handed as scalpers rush to feed a hungry gray market Photo: M.I.C.Gadget Even with the support of Chinese riot police, police dogs, private security guards and an elaborate grid of metal barricades, Apple AAPL could barely contain the chaos when the gates of the Hong Kong Apple Store opened Friday morning and customers began to run up the store’s spiral glass staircase. An Apple-sanctioned queue of roughly 1,250 were allowed to file in, while a larger crowd of more than 2,000 pressed for a chance. Many of the first customers were reported to be scalpers and professional line-sitters from South Asia (see here), and indeed resellers in hoodies could be seen rushing from the store with bags of five iPhones each to flip for a quick profit in Hong Kong’s extensive gray market. By noon, five hours after the gates opened, Apple had run out of stock. It was a lesson in the economics of scarcity, documented at every stage by the Chinese blog M.I.C. Gadget. You can view its collection of photographs here. Below: A YouTube video that shows the gates opening at 7 a.m. local time.