Company busted in China made 41,000 fake iPhones worth $19.4 million
China’s burgeoning knockoff industry was exposed again at the weekend when Beijing police revealed on Weibo that they had shut down a firm that had produced fake iPhones worth almost US$20 million.
The massive operation was run by a husband and wife from Shenzen who bought fake and second-hand parts from suppliers inside and outside China and hired hundreds of workers on six production lines to manufacture the handsets, the Wall Street Journal reported.
The fake iPhones, an estimated 41,000 in all, were sent to overseas countries including the United States. A tip-off from U.S. authorities exposed the operation, which was raided in May. Nine people have been arrested.
The production of Apple fakes has been big business in China for a number of years. Fake Apple Watches were available even before the real thing could be bought in stores, and in 2011 authorities uncovered 22 fake Apple retail outlets in the city of Kunming.
The global value of counterfeit goods is estimated at US$1.7 trillion, with around 70 percent of fakes thought to be manufactured in China.
While Apple will be keen to see Chinese authorities crack down on the counterfeiters, its growth there has been staggering. The company saw 112 percent year-over-year revenue growth in the Greater China region (China, Hong Kong and Taiwan) in its third quarter.
Apple Chief Executive Tim Cook told the Wall Street Journal last week that he expects China to become the company’s biggest market in the future, saying “we’re only getting started there”.
“China is a fantastic geography with an incredible unprecedented level of opportunity there. And we’re going to be there,” he said.
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