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Fake Apple Store in China even fools staff

By Melanie Lee

SHANGHAI (Reuters) - Chinese counterfeiters have had a field day pumping out knockoffs of Apple Inc's best-selling iPhones and iPads, but one appears to have gone a step further -- a near flawless fake Apple Store that even employees believe is the real deal.

The store in Kunming was stumbled upon by a 27-year-old American blogger living in the city, the capital of China's mountainous southwestern Yunnan province.

Complete with the white Apple logo, wooden tables and cheery staff claiming they work for the iPhone maker, the store looks every bit like Apple Stores found all over the world, according to the blogger, who goes by the name "BirdAbroad".

But Apple has no stores in Kunming and only 13 authorized resellers in the city, who are not allowed to call themselves Apple Stores or claim to work for Apple.

"This was a total Apple store rip-off. A beautiful rip-off -- a brilliant one -- the best rip-off store we had ever seen," the anonymous blogger posted on Wednesday. "Being the curious types that we are, we struck up some conversation with these salespeople who, hand to God, all genuinely think they work for Apple."

An Apple spokesman in California declined to comment on the fake stores but said consumers can go to the company's website to locate authorized outlets.

Apple takes infringement of intellectual property very seriously and acts swiftly to protect its secrets. When an iPhone prototype turned up at a U.S. bar last year and was sold to a technology blog Gizmodo, Apple kicked up a furor and investigators raided a journalist's home.

The United States and other Western countries have often complained China is woefully behind in its effort to stamp out intellectual property theft.

"Famous U.S. brands, and the respect and loyalty they command from consumers, are critical to our ability to compete in China and around the world. Press reports of a fake Apple store are indicative of the challenges we continue to face combating intellectual property theft in China," a senior U.S. trade official said.

"Confronting those challenges is a high priority for the Obama Administration," the official added.

It was unclear whether the store was selling fake or genuine Apple products. Countless unauthorized resellers of Apple and other brands' electronic products throughout China sell the real thing but buy their goods overseas and smuggle them into the country to skip taxes.

The store had sections devoted to different Apple products, similar to real Apple stores, and large posters advertising the iPhone 4 and MacBook Pro, according to photos on the blog. (http://birdabroad.wordpress.com/2011/07/20/are-you-listening-steve-jobs/)

The Cupertino, California-based firm reported forecast-smashing results on Tuesday, helped by massive growth in Asia, and China in particular.

Apple executives have said they have just scratched the surface in China and the company is in the process of opening more stores there.

SHADY ORIGINS

In May, China was listed for the seventh year by the U.S. Trade Representative's office as a country with one of the worst records for preventing copyright theft.

Also, piracy and counterfeiting of U.S. software and a wide range of other intellectual property in China cost U.S. businesses alone an estimated $48 billion and 2.1 million jobs in 2009, the U.S. International Trade Commission said in May.

Apple, which was slow to establish its brand in China, has four retail outlets in Beijing and Shanghai. The firm plans another two more this year, including one in Shanghai and another in Hong Kong.

But the immense popularity of Apple's iPads, iPhones and MacBook computers has spurred a bumper crop of resellers with dubious credentials.

At one unauthorized Apple reseller in Shanghai on Thursday, the shop was decorated in much the same way as Apple stores, with wooden tables and chairs with iPads laid out for customers to try out.

The shop was not on a list of authorized Apple resellers in Shanghai. (http://www.apple.com.cn/reseller/index.php)

But the proprietors fell short on the attention to detail displayed by their counterparts in Kunming. For one, the store also sold some other products, like chocolate jigsaw puzzles, that would never see the light of day at a real Apple Store.

"Do you have a Web camera for my MacBook?" asked one customer. "No, but our other store in Lujiazui should have it," said the sales representative, referring to Apple's genuine retail store in the heart of Shanghai's financial district.

When approached, none of the staff claimed to work for Apple or that the store was an actual Apple Store. Customers appeared unfazed.

"I prefer to get my Apple products fixed here. It's very troublesome going to the real Apple store in Lujiazui because not only do you have to pay to get repairs, but you have to make an appointment to see the sales specialist," said Xavier, a 30-something expatriate who declined to give his last name.

"The prices are the same as the real store but the service is better here," he added, before whipping out his two iPads to tinker with.

(Additional reporting by Poornima Gupta in San Francisco and Doug Palmer in Washington; Editing by Jason Subler, Lincoln Feast, Richard Chang and Paul Simao)

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