China Busts Fake iPhone Supplier

Fake iPhone bust: police raid factory making $19 million worth of fake iPhones

By Lulu Chang July 27, 2015

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It sounds like the plot of a high-speed thriller — police raid a factory, find $19 million worth of contraband, and arrest nine suspects. Only in this case, it’s not a drug bust — it’s all about iPhones, China, which has grown infamous for its knock-off versions of quality goods, is attempting to crack down on the criminals who are engendering to this reputation, starting with one of the largest producers and suppliers of fake iPhones in the country.

On Sunday, a posting on Chinese social media site Weibo revealed that a raid back in May resulted in the seizure of some 41,000 fake iPhones, valued at over $19.7 million. The Beijing-based supplier employed hundreds of people, and shipped their goods all over the world, including to the United States.

The masterminds behind the operation were a married couple, whose names have been partially disclosed as Yu and Xie. According to reports, the couple took advantage of China’s status as the wasteland of tech electronics (where all unwanted parts are dumped), and bought these used components along with fake parts bearing the Apple logo to create seemingly new and legitimate iPhones across six assembly lines. Both Yu and Xie are from Shenzhen, a city known for its ties to hardware manufacturing.

While Apple is no stranger to imitation products and similar knock-off scandals, the Wall Street Journal notes that “the case of the Beijing-based firm is exceptional both for its scale and its overseas reach.” While it is still unclear where many of these phones ended up, the production of tens of thousands of these devices means that they could be anywhere and everywhere at this point. In fact, it was only when these fake phones were discovered in the United States that the Chinese authorities were alerted, and the factory raided.

The Chinese government has recently ramped up its efforts against intellectual property theft as well as counterfeit goods, attempting to chip away at its unfortunate reputation as a nation of copycats rather than innovators. While this may not be an overnight transformation, the continued growth of the Chinese economy and the large number of successful businesses in the nation are certainly doing their part to help.

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