Chinese Police crack down firm which made fake iPhones worth $19.4 million

Chinese police have cracked down on a technology company, which has reportedly made more than 41,000 fake Apple iPhones and 66,000 ribbon cables worth a total of 120 million yuan ($19.4 million). As of now, the Police has arrested nine suspects which have been taken into custody.

The police have however, not disclosed the name of the company. According to a Police statement posted on Weibo, the Beijing-based firm first caught the authorities’ eye after fake China-made handsets were seized in the United States in May. Officials state that a 43-year-old male suspect surnamed Yu and his 40-year-old wife, surnamed Xie, bought used mobile mainboards from foreign countries and fake parts bearing logos from the southern Chinese technology hub of Shenzhen.

The alleged couple had also hired hundreds of workers to assemble these products and then sell them overseas. According to a report by Wall Street Journal, an Apple spokeswoman did not immediately reply to an email request from China Real Time. The report also added that  it is not clear whether the knockoff handsets were sold abroad or shipped back to the Chinese market.

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This isn't the first time that a fake iPhone racket has been busted. In 2011, five members of a gang involved in buying components to assemble fake iPhones were arrested in Shanghai, by the Chinese police. Reportedly, the five arrested were a part of a much larger gang, who operated from rented apartments in Shanghai.

The modus operandi of the gang involved around first buying components to be used in the making of visibly difficult to distinguish, fake iPhones from Guangdong in southern China, and then assembling them in apartments rented in Shanghai. During the raid, the Chinese police found as many as 200 of such fake iPhones in the gang's possession.

But these incidents will not affect the iPhone market in China. Reportedly, iPhone sales in China had beaten US for the first time this year. Apple’s iPhone sales in China soared, increasing its revenue in the country 71 percent to $16.8 billion, although that was helped by gift-buying for Chinese New Year as well.

Overall revenue rose to $58.01 billion in the second quarter ended March 28, from $45.65 billion a year earlier. That beat Wall Street’s expected revenue of $56 billion. Apple said it expected fiscal third-quarter revenue of $46 billion to $48 billion, in line with analysts’ average forecast of $47 billion.