A lesson in fake cell phone from China

July 2006

This year is the first year that I visited China after nearly a decade and the amount of changes I see everywhere is astonishing. One of the purposes of my trip was to help my business associate to source some good quality domestic brand cell phone for resale in the U. S. In the process, I learned a lot about how cell phones are made from the design process to the final product. I also experienced firsthand buying a counterfeit phone unknowingly. Apparently, with the rise of the electronic manufacturing industry in China, the counterfeits are not limited to just DVD, shoes, and apparels anymore. Cell phones, cameras and all type of electronics have its piracy. Almost every domestic brand with a solid reputable or well-known trademark has a hotline for authenticating genuine products. China is also becoming the world’s biggest cell phone market and it is riddled with intellectual property dangers for everyone who is involved in the trade of cell phones.

Shen Zhen, a former sleepy small town north of Hong Kong is now the center of electronics manufacturing and trade. While there are many independent or chain cell phone stores, they also have specialized malls just for cell phones. For example, the first three floors are full of stalls selling phones, services and accessories, and another two or three floors are devoted to repair, and used and new components. One can walk around and find all the necessary parts to assemble a phone that is currently on the market from the LCD to the main board to the case. A person who needs to get repair done can easily find the replacement part and service.

While most of the cell phones are legitimate, I was amazed by the variety of confusingly similar imitation and counterfeit ones. The obvious counterfeits are easy to spot with names like “Souy Ericisson” instead of “Sony Ericsson”, “Nokai” instead of “Nokia”, or “Motoralo” instead of “Motorola”. There are some counterfeit bearing the logo of the original manufacturer but with completely different electronics and firmware inside. It’s usually easy to tell when it is a counterfeit due to the lack of refinement in the material and workmanship.

I was interested in finding some quality, Chinese brand, tri-band (900/1800/1900MHz frequencies) GSM phone that can be used not only in China, but also in the U. S. To be used in the U. S., 1900MHz is necessary. It proved to not be an easy task as most of the domestic models are made with the 900/1800MHz market in mind, which includes China and most of the countries outside the U. S. When I find a phone that is appealing, I will ask the seller about its radio frequency and the sellers often did not know, so I have to ask for technical specification. One phone I found had the tri-band feature, and comes in a chrome covered stainless steel case bearing the name “CECT”. The model is T590. I was very pleased with the build quality and sturdy feeling of the phone and its features including a color screen, MP3 and MP4 playback.

CECT turned to be a Chinese cell phone manufacturer based in Beijing, and they mainly produce cell phones for the domestic market. I mailed this sample phone back to my business associate. Two problems happened soon after. About a week later, my business associate received it and told me that he really likes the phone and wants to import it. Soon after this, two problems happened. First, I could not find this phone on the manufacturer’s web site, so I sent them an email to inquire about this model. Then, after another week, my business associate told me the phone just died. It would not power on regardless if it had a charger connected. I thought that is either bad luck or quality and asked him to send it back to me.

Since I am Beijing, there is no practical way to locate the seller who sold me this phone and request an exchange or refund. Once I have the phone, I went to CECT's headquarter in Beijing. I asked for the person in charge of export sales, and showed him this phone. To my surprise, he said it is a counterfeit bearing their trademark. They don’t even have a model that look like it. So to repair or replace it is not an option. I requested a written statement. They give me a written statement of confirming it is a fake. So I can take this to the regulators of commerce in Shen Zhen and prosecute the vendor. The manager in charge of exporting admitted that their company simply does not have the same type of resources as larger companies like Motorola or Nokia to keep a dedicated anti-piracy team.

Curious, I wanted to see what was exactly wrong with the fake phone. I took it to a repair shop and they found it had a short-circuit CPU. It is replaceable, so I asked them to replace it for a little over $20 US dollars. I want to see how long this phone could last after it is fixed. The quality control from the counterfeit manufacturer was non-existent. In the several years that I have been in the cell phone business, I never saw a case of a phone failing in the first two weeks, with a bad CPU. Apparently, the counterfeit CECT T590 is an physical imitation of the Nokia 8800, which is a slide-opening style phone with a stainless steel case, and is much more expensive in comparison. The real CECT T590 is not tri-band or stainless steel. You can see the comparison in the following photos:

Fake CECT T590

Real CECT T590

Real Nokia 8800

 

The story could have ended here. However, a person I know was going to Shen Zhen and asked me to give them the counterfeit statement so they can seek complaint to local commerce bureau. The local commerce bureau actually did something about it. They went to the mall to find the seller, who is not there anymore most likely because he could not sustain the business. The official from the commerce bureau fined the mall few thousand yuan for allowing sales of counterfeit products to take place under its roof. We got the money back for the phone based on the receipt.

I believe the apple doesn't fall far from the tree, if I am inclined to perform a thorough investigation, the information I already have can lead me to the factory which made the counterfeit phone. I can possibly bust them as well. The counterfeit phones are cheap for a reason. They don't have to pay for the intellectual property license, perform numerous quality control and assurance procedures, or offer any technical support. Even though I am very familiar with the big international cell phone brands, I was not familiar with the Chinese domestic brands and I became an unwitting victim of a physically well made counterfeit product. Thanks to a combination of my perserverance and thoroughness and luck, I had recourse, but even if I didn’t, it is a valuable lesson in the problems of consumer electronics trade that far exceed its cost.