Police shut down Chinese factory that produced $19M worth of fake iPhones
A major iPhone counterfeiting factory, which produced so many fake Apple devices that some even made their way to the U.S., has been shut down by Beijing police and led to nine arrests.
The factory is said to have built more than 41,000 fake iPhones valued at as much as 120 million yuan, or $19 million, according to Reuters. The arrests come as part of a crackdown on intellectual property theft being undertaken by Chinese law enforcement, as the country looks to shake its reputation for being a haven for fake goods.
The elaborate operation, run by a husband and wife team, was said to have six assembly lines and "hundreds" of workers. It relied on second-hand smartphone components that were repackaged as authentic iPhones, then exported and sold.
The Beijing factory was actually shut down as a result of a tip from U.S. authorities, who had obtained some of the knock-off iPhones on American shores.
iPhone counterfeiting is not new -- a similarly sophisticated operation in China was broken up in 2011. But that raid led to the seizure of only 200 fake iPhone units, while the latest Beijing crackdown yielded 1,400 handsets.
Apple's popularity in China has led to extremely elaborate efforts to counterfeit, including entirely fake Apple retail stores that tricked shoppers into thinking they were run by the Cupertino, Calif. company.
The factory is said to have built more than 41,000 fake iPhones valued at as much as 120 million yuan, or $19 million, according to Reuters. The arrests come as part of a crackdown on intellectual property theft being undertaken by Chinese law enforcement, as the country looks to shake its reputation for being a haven for fake goods.
The elaborate operation, run by a husband and wife team, was said to have six assembly lines and "hundreds" of workers. It relied on second-hand smartphone components that were repackaged as authentic iPhones, then exported and sold.
The Beijing factory was actually shut down as a result of a tip from U.S. authorities, who had obtained some of the knock-off iPhones on American shores.
iPhone counterfeiting is not new -- a similarly sophisticated operation in China was broken up in 2011. But that raid led to the seizure of only 200 fake iPhone units, while the latest Beijing crackdown yielded 1,400 handsets.
Apple's popularity in China has led to extremely elaborate efforts to counterfeit, including entirely fake Apple retail stores that tricked shoppers into thinking they were run by the Cupertino, Calif. company.
Comments
So a Samsung factory, then.
Ha ha, the poor people with their China knock offs!
Did these actually work with iOS!?
You beat me to it! LOL
A team of folks with fake money should go in and buy all their stock.
Oh, wait...
Would hardly be worthwhile. Not like you'd get much for a Sammy knockoff. Heck Xiaomi knockoffs would probably be worth more!
This shows that the Chinese government values Apple more than their own companies. They did this to show any other company who is ripping Apple off to think twice. China would not shut down one of their own companies unless they saw more value elsewhere.
Either that or they stopped making "contributions" to the local politicians.
This shows that the Chinese government values Apple more than their own companies. They did this to show any other company who is ripping Apple off to think twice. China would not shut down one of their own companies unless they saw more value elsewhere.
Either that or they stopped making "contributions" to the local politicians.
I was thinking the same thing as auxio.
My mother used to work in China as an accountant, and according to her, local officials stopped by their company regularly to demand bribes. At one point, when the company decided not to pay, they were made to jump through ridiculous bureaucratic hoops to keep from being shut down.
I think what Maestro64 says makes sense, that China sees value in Apple because of the jobs and industry it brings into the country, so it makes PR moves such as this to placate the U.S. But I also think China is not trying to shut down the five or six other neighboring knock-off factories that make more money than this mom and pop operation.
But it’s also true that Apple really has no choice but to manufacture in China. India may be the next big cheap labor destination but that is a long way off yet. Apple will tolerate a lot of this because it has to. It’s not like Apple will up and move manufacturing somewhere else. Now if an iPhone could be manufactured in a completely automated factory things might change but I think that day is also far off.
Lol!! I was thinking the same thing.
Those knockoffs wear the Samsung label. That's like repellent for customers with good taste.
But it’s also true that Apple really has no choice but to manufacture in China. India may be the next big cheap labor destination but that is a long way off yet. Apple will tolerate a lot of this because it has to. It’s not like Apple will up and move manufacturing somewhere else. Now if an iPhone could be manufactured in a completely automated factory things might change but I think that day is also far off.
I agree, manufacturing in China is a financial necessity.
If it made financial sense, I would prefer all Apple products to be manufactured here in the States like the Mac Pro. Bring the jobs, business, know-how, all back.
Or at least outsource manufacturing to a country with more respect for intellectual property rights. Without its cheap labor, China is the worst place in the world to manufacture, in my opinion. They'll destroy their own environment and take advantage of their own people to make your product, and then steal your technology and know-how to make knock-offs and run state-sponsored businesses that compete with you.
Apple may be doing well in China now, but I wonder if one day a Xiaomi-like company that targets the premium market will steal Apple's thunder in terms of their domestic market.