InfoTech: A fake Apple a day keeps the real stuff at bay

Way back in the early days of PCs, the Apple II was a design icon. Apple was a side-show in the nascent PC market, already being bulldozed by the might of Microsoft and its then dominant market partner IBM. But the PC was bulky and ugly. And IBM did not have a monopoly on the technology inside the boxes: even then, there was a lot of bought in components. And even then, small rivals could buy the bits and produce their own computers. And those computers could be bought anywhere, not just from IBM's authorised retailers or, in the case of Apple, from the handful of shops that the little rebel considered worthy of carrying its product.

In Hong Kong's Tsim Sha Tsui, Apple II computers were in the windows of small shops. Except they were not. The boxes were clones of the (for the time) sexy little cases but the innards were pure PC. And the prices reflected the fact that the components were off-the-shelf bits assembled in the back of the shops.

Even now, blatent copies of the iPhone and iPad are churned out by factories in China - but they don't use iOS and they don't do lots of what the iPhone does. And they are cheap.

But all of that is a huge step away from what the Chinese government is having a hissy-fit about. Five "Apple Stores" have been identified as being totally unconnected with the Apple company and the products they sell are not Apple.

To a degree, it's Apple's own fault: since abandoning its technical differentiation and running Intel chips under what is largely a rebranded version of Linux, Apple is much easier to replicate.

The stores are doing good business: Apple cannot keep up with demand for its latest iPad, in particular. In Indonesia, for example, several people have been arrested for selling grey imports of the iPad. In Malaysia, a company is offering a range of valuable benefits over and above the purchase price to anyone who can bring them a new, boxed iPhone, even from the USA where the specifications are different to the Malaysia market.

In China, where shopping remains largely a face to face activity, Apple has concentrated its distribution in the major cities, leaving vast parts of the country without access to Apple phones, tablets and computers. This strategy is similar to that adopted in relation to its computing products in other markets before internet sales became commonplace.

Chinese authorities are reported to be taking action based on two approaches: businesses which do not have the necessary business licences and those unlawfully using Apple's logo.

But it appears that simply mimicking Apple's product is not sufficient to raise the hackles of the enforcement agencies.

But it is not just in relation to iProducts that counterfeits are finding their way into the retail markets: in Singapore last week, the makers of a leading brand of contact lenses responded to complaints that some lenses were causing discomfort to wearers. The company found that the users had been sold counterfeit. Using the tactics of the CD / DVD counterfeiters, the manufacturers of the fakes made deliberate errors in the printing of packaging so as to argue that they were not exact copies. The lenses, however, were manufactured poorly and a coating on the inside of the lenses caused irritation to the eyes of the wearers. Investigators found the fakes in a number of optical shops and discovered that the shop owners had bought them at prices far below the price of the legitimate product and

And in Hong Kong recently, it was found that fake mobile phone batteries had found their way into the legitimate supply chain. Some exploded when charged, some got hot in use causing a reported danger of fire.

It's not a new problem. In his 1996 book "How not to be a money launderer" Nigel Morris-Cotterill* wrote that airlines had discovered that counterfeit components had been fitted at some maintenance stations and that a UK car component manufacturer had found fake hoses, including brake hoses and brake pads, in their own distribution network - in exact copies of the original packaging.

*Nigel Morris-Cotterill is Head, The Anti Money Laundering Network, ultimate owner of ChiefOfficers.Net. His book How Not To Be A Money Launderer has recently been re-released for the Kindle.Details:

How Not To Be A Money Launderer (e-reprint)