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China busts up fake iPhone ring, report says

by Phil Hornshaw

The iPhone is the world’s best-selling smartphone – so popular, in fact, that authorities in Shanghai reportedly have broken up a criminal ring making its money by making and selling fake iPhones.

The report comes from Reuters, which is citing local media as reporting the breakup of the faux-phone ring. According to the story, authorities arrested five people after they bought components in Guangdong, in southern China, and then transported them to Shanghai, where they were assembled into the fakes and sold.

Apparently, the fake iPhones are pretty much the same as the real ones. Customers buying the phones seemed to have been unaware they weren’t buying real-deal iPhones: according to cops, the devices were really hard to distinguish from the genuine article.

Reuters reports that about 200 fake iPhones were found during the crackdown, and they were very similar to Apple’s originals. Functionally, the phones were pretty much the same, except for lower battery life in the fake units.

The fake iPhones mix genuine parts with fake ones, and each one cost around 2,000 yuan, or $313, to produce. They were sold on the Internet and in markets for about 4,000 yuan, which is about $627 U.S. That’s pretty close to what a real unlocked iPhone would cost, making it even harder to identify the fakes.

China has only had the iPhone 4 for about a year, but Apple’s investment in the emerging market has paid off pretty well. Meanwhile, China has something of a bad reputation for pirated goods. Reuters reports that knockoffs of bags, computer software and other high-end goods can be found pretty easily in Chinese shops, despite the country receiving criticism from the rest of the world for not preventing the fakes from being sold. There are also other pirated iPhones available in the country, like the “hiPhone 5,” which was built based on leaked images purported to be of the iPhone 5, Reuters reports.

Even though this ring has been broken up, it seems that the announcement of Apple’s next iPhone will be coming tomorrow, Oct. 4. This will probably open the door for at least a couple more knockoff iPhones in the country. Like the rest of us, though, the crooks are going to have to wait for Tim Cook to announce what kind of new handset we can expect, since it seems nobody is sure exactly what Apple has in store.