UK flooded with fake iPhones

Counterfeiters target UK market ahead of official launch

Ian Williams, vnunet.com 08 Nov 2007

Apple's highly anticipated iPhone is due for launch in the UK on Friday, but the market has already been flooded with fake and 'grey' import handsets.

Domain registrar NetNames has reported that the past three days has seen more than 450 online auctions for "unofficial" iPhones.

The analysis, carried out through NetNames' Envisional brand protection unit, revealed that 62 per cent of the iPhones offered in these online auctions originated in the UK, where the iPhone is not launched until 9 November.

In 70 per cent of these auctions the iPhones were advertised as 'unlocked', despite the fact that official iPhones in the UK are only being offered on the O2 network.

"Consumers need to be aware of the threats posed by counterfeit goods and grey market imports online and make sure that they purchase only from reputable sources," said Jonathan Robinson, chief operating officer at NetNames.

"The growth of online auction sites has unlocked major new opportunities for counterfeiters and grey market traders to move large volumes of products.

"Major brands need to have a greater visibility into what is happening to help protect the consumer and their own reputations."

The iPhones offered online are selling mainly on eBay for an average price of £335, alongside CECT iPhones which are sophisticated replicas from China selling for an average of £56.

This influx of unofficial iPhones is characterised by mass grey market traders who push large numbers of goods into the UK market through the internet .

In this case, the top 10 sellers found by NetNames have been responsible for over a third of all UK iPhone movement prior to the launch.

Charlie Abrahams, vice president at internet fraud prevention and brand protection company MarkMonitor, warned vnunet.com of the disastrous implications these fake and grey imports can have on a brand.

"Well publicised launches and peak seasons such as Christmas are bound to attract the fraudster," he said.

"Manufacturers of desirable consumer products, including mobile phones and electronics, are especially susceptible to counterfeit sales on the internet eroding reputation and revenues."

Abrahams explained that it is easy for fakes to be portrayed as the real thing because the online purchaser does not get a chance to examine the product until after it has been delivered.

"We see many examples of sites that abuse well known brands by diverting their traffic to a fake site through techniques such as domain kiting, pay-per-click and cyber-squatting," he said.

"At this point the fake site can sell counterfeit or competitive products without the consumer being aware."

Abrahams advises brand owners to focus more attention on the internet as the fastest growing route to market for counterfeit products.

They should also develop plans to deal with these products, including consumer education, online intellectual property ownership strategies and aggressive detection and enforcement processes in order to deal with infringements.

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