New Wikileaks cables detail Apple's struggle with Chinese counterfeiting

New Wikileaks cables detail Apple's struggle with Chinese counterfeiting

Summary: New Wikileaks cables show the work of Apple's "global security team", cracking down on piracy in emerging markets in China and Asia -- and struggling.

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Apple was 'too slow' to act against rife counterfeiting in China and the Asia market, according to the latest release of Wikileaks cables, seen by CNN.

In March 2008, Apple organised a team to counter the sudden boom of counterfeit Apple goods, from iPhones to iPods, according to a cable from the U.S. Embassy in Beijing, dated September 2008.

But three years on, and with the recent reporting of fake Apple stores in major Chinese cities, progress has been slow, and Beijing does not see the piracy issue as a "high priority".

(Source: Reuters, via IBTimes)

Apple's recently formed "global security team" were recruited, reportedly from Pfizer, after the pharmaceutical giant had successfully cracked open an illegal Viagra ring in Asia.

The team works in China and further afield across Asia to crack down on counterfeit goods, produced by back-street pirates and sold in either fake stores or street vendors.

But the Chinese government is not helping as much as it should, the cable adds.

One highlight shows that Beijing "refused to investigate" a manufacturing plant of fake Apple products because it would "threaten local jobs", adding that any raids on a imitation Apple store could drive away shoppers from a local mall.

A former FBI special agent, John Theriault, former Pfizer security lead, now leads the global security unit at Apple. Don Shruhan, who worked under Theriault, now leads the Apple security team in Hong Kong.

But the team was keen to keep a low profile. After Theriault briefed Steve Jobs in 2008, it was agreed that this would not be widely publicised.

Shruhan told the U.S. Embassy in Beijing that he was "afraid" of the scale of the counterfeiting operation of Apple's leading products, and the inability of Apple's lawyers to operate with the Chinese authorities in matters relating to piracy, the cable says.

Apple only has four stores in China -- still an emerging market -- with a new Hong Kong store on the way.

But China is a tough market to crack for Apple, which still has to contend with a wide range of knock-off goods. It is expected that the upcoming 'world' iPhone for developing markets could have a significant, positive impact on the Chinese market.

Since the discovery of many knock-off Apple stores earlier this year, many stores in China were shut down shortly after they were discovered.

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Topics: Apple, Hardware, Mobility, Networking, Telcos

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15 comments
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  • RE: New Wikileaks cables detail Apple's struggle with Chinese counterfeiting

    "in emerging markets in Chinese and Asia" should be
    in emerging markets in China and Asia
    The Danger is Microsoft
    • RE: New Wikileaks cables detail Apple's struggle with Chinese counterfeiting

      @The Danger is Microsoft
      it should be "in emerging markets in China and other Asian countries"
      zdcalculus
  • RE: New Wikileaks cables detail Apple's struggle with Chinese counterfeiting

    'Apple recently formed ?global security team?' should be
    Apple's recently formed ?global security team?
    The Danger is Microsoft
  • RE: New Wikileaks cables detail Apple's struggle with Chinese counterfeiting

    Double-U Tee Eff people.
    josh92
    • Thanks, all

      It's been a long day, already. My apologies. Fixed.
      zwhittaker
  • RE: New Wikileaks cables detail Apple's struggle with Chinese counterfeiting

    Surprise, surprise... China doesn't want to cooperate with a U.S. investigation against them.
    Stopping the piracy would cost local jobs? What a load of B.S.!
    It's too bad China doesn't produce anything worth pirating, or we could do the same to them!
    jmwells21
    • RE: New Wikileaks cables detail Apple's struggle with Chinese counterfeiting

      @jmwells21 If the USA stop sealing ideas China will have some thing worth pirating ?
      newbedave
      • RE: New Wikileaks cables detail Apple's struggle with Chinese counterfeiting

        @newbedave If someone stop steeling you Engrish you have something wright to good
        lelandhendrix@...
  • They Don't get China...

    The Chinese government works on their own terms, as does anyone with authority in China.
    I live there and I can tell you that they're wasting their time.
    Naryan
  • There's an well known adage

    If you produce something for the Chinese market, you'll sell one copy. They'll take it from there.
    PepperdotNet
  • RE: New Wikileaks cables detail Apple's struggle with Chinese counterfeiting

    Got no sympathy for Apple, or Microsoft etc. As Pepper.dot.Net says it's well known what the Chinese do.

    But the apologists should be jumping in soon to defend them.
    spin498
    • RE: New Wikileaks cables detail Apple's struggle with Chinese counterfeiting

      @spin498
      defend them from what exactly? Nothing in the article has Apple doing anything wrong.
      anono
    • RE: New Wikileaks cables detail Apple's struggle with Chinese counterfeiting

      @spin498 So the fact that it's well known that the Chinese will knock off anything they can means that it's alright and you have no sympathy? If it's well known that if you park your car in a certain area it will get stolen and you do so does that mean it's your fault?
      non-biased
  • RE: New Wikileaks cables detail Apple's struggle with Chinese counterfeiting

    Lets see.....show a communist country how to produce your product, give them the technology to do it, give them the tooling, build the facility, take the US jobs and send it to them for cheap slave labor.....hmmm where should I place my sympathy? Every company knows this happens yet they do it anyway. I wonder why? Could it be that for the first 3 years they make a large fortune with the cheap labor? The people running such companies get millions in bonuses for making all that extra profit then bail. Why? Greed! Who pays in the end? The US labor force. They deserve what they get and they know from the start it will happen. Let every company who sends labor to the "free trade" countries that our labor can not compete with go bankrupt.
    tjones1966
  • RE: New Wikileaks cables detail Apple's struggle with Chinese counterfeiting

    IF Apple were to really want to combat piracy in China, why would the build a factory there in the first place? Can you blame a government for being unwilling to prosecute citizens at hte behest of a foreign company? Pull out of China Totally - find another place - preferrably in North America - to build, show your workers some loyalty, treat them like a great asset instread of a liability, and you will have a lineup for workers longer than you would believe.
    inkwell