Feature Article

February 06, 2014

Counterfeit Mobile Phone Industry Worth $6B Per Year

In the North American market, counterfeit phones don’t seem like much of a problem because, really they aren’t. The same can’t be said for places like India or China, however, where market growth is very high — India’s smartphone market alone grew 70 percent last year — and regulations are comparatively low.

In fact, the situation is so advantageous to device counterfeiters that black market sales of counterfeit and substandard phones are now at $6 billion per year, according to a recent report by the Mobile Manufacturers Forum (MMF).

"Research estimates sales of around 148 million counterfeit or substandard cellphones in 2013 through visible retail sites, with many more expected via unofficial retail outlets, online auction websites and local black markets," said Michael Milligan, MMF secretary general, in a statement. "Counterfeit phones are made with cheap sub-standard materials and have been shown to contain dangerous levels of metals and chemicals like lead."

Indeed, counterfeit devices aren’t just harmful to smartphone manufacturers’ bottom lines; they can also end up causing very real harm to consumers. A relatively recent example of this is the fatal electrocution of a Chinese flight attendant. This incident occurred as a result of the woman using a non-Apple, likely counterfeit, USB power adapter with her iPhone 5.

The main issue here is that many unknowingly purchase fake cellphones and cellphone products from the Internet, usually because they are available at a cheaper price than their official counterparts. Fortunately, there are ways to identify fake cellphones, namely by checking the IMEI number, being wary of very low prices, and paying close attention to quality.

Starting with the IMEI number, any time this comes up reported as invalid, the device is useless, even if it does appear to be the genuine article. In terms of price, the general rule of thumb is if it sounds too good to be true, it probably is. Finally, sloppy printing, misspelled words and defective workmanship are sure signs of counterfeiting.

Edited by Cassandra Tucker

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