Talk is cheap: Counterfeit mobile handsets proliferate in China

Chinese consumers appear fixated with Apple’s iconic iPhone. It draws throngs of eager buyers in Shanghai’s Xujiahui computer market. Similarly, at the Canton Trade Fair in October, vendors hawking familiar-looking silver and black slabs were convulsed in crowds, in sharp contrast to the deserted booths of rival brands, where lonely salesmen slurped disconsolately at noodles. So how can it be that China Unicom has seen dismal initial sales under its exclusive arrangement to sell the iPhone in China?

Chinese consumers appear fixated with Apple’s iconic iPhone. It draws throngs of eager buyers in Shanghai’s Xujiahui computer market. Similarly, at the Canton Trade Fair in October, vendors hawking familiar-looking silver and black slabs were convulsed in crowds, in sharp contrast to the deserted booths of rival brands, where lonely salesmen slurped disconsolately at noodles. So how can it be that China Unicom has seen dismal initial sales under its exclusive arrangement to sell the iPhone in China?The explanation lies in China’s huge “grey” market for handsets, which includes some genuine phones imported without the manufacturer’s blessing but is mainly comprised of knock-offs.To read this report in The Economist in full, see:
www.economist.com/businessfinance/displaystory.cfm?story_id=14931575

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