First things first, is the sale of smuggled iPhones in China a black market or a grey market? From Wikipedia’s black market page:

A black market or underground economy is the market in which goods or services are traded illegally. The key distinction of a black market trade is that the transaction itself is illegal. The goods or services may or may not themselves be illegal to own, or to trade through other, legal channels. Because the transactions are illegal, the market itself is forced to operate outside the formal economy, supported by the established state power.

Since China has not yet approved the sale of the iPhone 6, I’d say the current sales make up a black market.

That aside, the coverage of the smuggled goods paint a picture worthy of a James Bond film. From last week’s WSJ:

Hong Kong authorities said Sunday that they foiled an apparent attempt to smuggle 3 million Hong Kong dollars ($387,000) worth of high-end electronics—including at least 138 new iPhones—that were being loaded onto a speedboat in a rural coastal area opposite the Chinese shore. Customs officials said several men fled on the boat when approached by law-enforcement officers, leaving behind 15 boxes that also included 1,890 hard drives and 16,235 computer-memory chips.

This from Friday’s LA Times:

The new iPhones have been smuggled into mainland China in paper containers for cream pies and toothpaste, coffee and tea boxes; one man was even caught carrying eight devices in his underwear.

Fascinating.