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IT knock-offs on the rise Featured

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The FBI says one in ten IT products sold in America is counterfeit. It is not just watches, handbags, shoes, clothing and Viagra anymore.

I ambled into a Sydney market last weekend admiring the enterprise and perseverance of the stall vendors. I spied some tech stuff so like a moth to a flame I went. The stall had more than 20 varieties of headphones including Apple, Sennheiser, Beats, Monster and Sony.

“Genuine Apple 3 button ear buds $10” he said. “Genuine fakes” I retorted. “No real – just import myself from China, no middleman”…

So begins a very long list of ‘real fakes’ and an insight into what is estimated as a $200 billion industry with direct links to organised crime.

First is the knock-off – low quality replicas that barely fool the purchaser usually sold via the ‘knock-off markets’ in Asian cities. Last year I visited some of these in Beijing, Shanghai, Hong Kong, Singapore and the Philippines and the extent of product was amazing.

Phones are key targets - I saw Nokia, Samsung and Apple in great quantities ranging from poor Android based lookalikes to some very impressive and well-made units that, if you believe the shopkeep, came from the same factories that the originals were made in. Also cases like OtterBox and Speck were typically fake.

Cameras - Nikon cameras and lenses are the most copied but any fast selling, higher priced unit is a good target. Counterfeiters can reverse engineer a knock-off and packaging  within weeks.

Apple ‘anything’ – iPads, iPods, MacBook, Apple TV, iHub and even fake Apple stores!  

 

 

 

 

 

 

Headphones are popular - Beats, Sennheiser, Klipsch, Sony, Apple, Skullcandy and Monster. Knock-offs typically sell for about 30% of the RRP.

Cables - particularly Monster and other brands that sell items like HDMI for $60+ are typically seen for $20 and can be negotiated down to $5.

Flash memory (current price is about 60 cents per GB) and the largest legitimate size is 64GB but there are hundreds of branded fakes offering 256GB or larger for ridiculous prices. Most simply don’t work past 32 or 64GB despite the size on the package.

Gaming consoles (especially handhelds like Nintendo), controllers (Wii) and accessories are rife.

But sometimes the fakes have more sinister intent.

In 2011 Cisco had a run of fake routers complete with hacker’s backdoors that were destined for corporate and military use.

Asus and Gigabyte have had inferior computer parts branded as theirs in an attempt to tarnish their reputation.

LG has had fake TV’s (mainly sold in Asia as freight would have killed their export here) but smaller TV’s are being rebranded.

Windows OS – in January 2012 94,000 copies were seized from Comet Group PLC UK.

LED lighting is an area where counterfeiters are moving in. Not that it is hard to make LED lights but it is easy to make and sell inferior lighting branded as something better via the internet.

Laser toner and ink (particularly HP and Samsung) are in plague proportions - “genuine fakes’ via the internet.

Replacement laptop and phone batteries are rife and can cause fires

The next big thing

Any well-known brand with small, reasonably high priced products is a target. Samsung Galaxy products are already in the counterfeiters sights. Only last month NSW police seized ‘tens of thousands of dollars’ worth of alleged counterfeit goods including Apple and Samsung products with more seizures expected…’

Samsung also took on the counterfeiters in East Africa in an effort to clean up the 3 million Samsung fakes known (via the IMEI numbers) to be connected to the Telco networks there.

But the real issue is that fakes are now more about organised crime than the 5,000 Asian factories that supply this multi-billion industry. In July 2011 18,000 ‘IT” fakes were on sale at 23 e-commerce sites. When organised crime and the internet is involved it has to mean scams and ID theft of credit card details will follow.

What can you do?

This is not a sensational article – its factual and the extent of counterfeit goods in Australia is larger than anybody suspects. It is mostly sold in markets but increasingly at on-line sites and the only advice I can give is that if it is more than 20% below RRP look very closely and never pay by credit card.

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Ray Shaw

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Ray Shaw ray@im.com.au  has a passion for IT ever since building his first computer in 1980. He is a qualified journalist, hosted a consumer IT based radio program on ABC radio for 10 years, has developed world leading software for the events industry and is smart enough to no longer own a retail computer store!

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