Wednesday 31 August 2011

WikiLeaks cables detail Apple's battle with counterfeits in China

According to cables obtained by WikiLeaks, Apple was slow to act against the booming counterfeit industry in China and other Asian countries, 
According to an electronic memo from the Beijing embassy dated September 2008, the technology giant eventually organized a team in March 2008 to curtail the explosion of kickout iPods and iPhones.
Yet, three years after Apple moved to crack down on widespread counterfeiting and put pressure on China, progress has been slow. Gadget piracy isn't a high priority for the Chinese government, the U.S. reports and experts say.
Apple's official recently formed global security team were recruited from Pfizer after they executed a series of crackdowns on counterfeit Viagra production in Asia.
John Theriault, formerly Pfizer's security chief and, before that, a special agent for the Federal Bureau of Investigation, leads Apple's global security unit. Don Shruhan, who performed for Theriault at Pfizer, is recently a director on Apple's security team in Hong Kong.
Shruhan told the Beijing embassy official that his group at Pfizer spent five years planning raids on counterfeit drug rings, the cable says. He said he's threatened of the volume of imitation Apple products being manufactured in China and about the inexperience of Apple's lawyers in dealing with Chinese authorities, the report says.
An Apple spokeswoman is not interested to comment. A Pfizer spokeswoman, who refused  to comment on personnel matters, said the company has a strong global security team to handle the raise in counterfeit medicine worldwide.
WikiLeaks, a group that publishes private government documents, posted tens of thousands of previously unreleased U.S. diplomatic cables last week. The reports from the Beijing embassy detailing Apple's piracy crackdown were unclassified, but many were described as "sensitive" and "not for Internet distribution."
In December, Apple said it removed an application from its mobile store that let people browse WikiLeaks documents from their iPhones "because it violated developer guidelines." The company suggested that the app broke laws or could be harmful to people, but many free-speech advocates cried censorship, as they have in the past when Apple has pulled apps.
The fresh WikiLeaks documents shed new light on Apple's struggles with intellectual-property theft in China, but the subject hasn't completely flown under the radar.
News media were rapt after detecting that China is home not only to fake Apple gadgets but also to, which had many of Apple's signatures. The Chinese government ordered to close five unofficial because they had not secured proper business permits from Chinese government, but a spokesman for China's Kunming government defended the others, saying they sell authentic Apple merchandise, according to return
Apple owns and operates four stores in China. The three in Beijing and the one in Shanghai are Apple's highest trafficked and top grossing stores in the world, Peter Oppenheimer, Apple's financial chief, said in an earnings call in January.
But the demand for Apple products is insatiable there. Due to demand in market stores have begun to sell the products without Apple's permission, while others are hawking cheaper, lower-quality gadgets that are aesthetically similar and bear the chic Apple logo.
China's Guangdong province, the country's most populous region, has become a hub for producing and selling counterfeit Apple products, two of the newly surfaced cables say. The Foxconn Technology Group, which assembles products for Apple, operates factories in Guangdong.

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