Ever wonder where most of the world’s knock-off Apple products and electronics come from? Recently, I took a trip to Shenzhen in China and got to check out the madness first hand. In Shenzhen, they’ll slap an Apple logo on just about anything and try to pass it off as legitimate. Needless to say, it makes for a very comical experience…
Last week at Apple’s yearly briefing for accessory makers in its Made-for-iPhone/iPad (MFi) licensing program, the company unveiled new Lightning connectors and specs for Lightning receptacles that will soon be available for implementation in MFi accessories. The new Lightning receptacle, scheduled to start shipping next year, will allow accessory makers to build new types of accessories that include a port for Apple’s proprietary Lightning connector previously reserved for its own iOS devices (pictured above).
Expand
Expanding
Close
A screenshot from China Mobile’s website, advertisng the 12th December preorder date.
The Wall Street Journal is reporting that whilst China Mobile’s 4G services do not launch until the 18th, the carrier will open preorders for the iPhone from this Thursday, the 12th of December.
[youtube=http://www.youtube.com/watch?v=G_NB97dRoWg]
China-based iPhone5Mod, makers of many unique iOS accessories and some of the first Lightning docks to hit the market, today announced a new hybrid controller/keyboard for iPhone 5. Dubbed “the lightest and thinnest keyboard for iPhone ever-made,” the hybrid controller case comes in three parts: a back case that attaches to your iPhone 5, and a controller and keyboard that are both 2mm thin and made of sturdy aluminum. The controller and keyboard attach magnetically, connects with Bluetooth 3.0, and provide 40 hours battery life from 1 hour of charge.
You can buy it now from iPhone5mod.com for $50 in black or white.
Main Features
The grey market for iPhones in China is no secret, with thousands of the devices smuggled from places like Hong Kong and the U.S. back into Mainland China for sale by scalpers. Today, Reuters reported that 26 suppliers of one of China’s largest online grey market iPhone dealers, Lanyou Shuma.com, are currently on trial in a Shenzhen court. According to local reports, many of the suppliers accused in the case are “described as housewives who frequently travel to Hong Kong.” Citing various local newspapers, Reuters said the housewives were usually paid 20 Yuan to 30 Yuan for each phone smuggled back to China, with 25 of the defendants accused of smuggling both iPads and iPhones:
On Wednesday, 26 suppliers of Lanyou Shuma.com were tried in a Shenzhen court as part of five rings that smuggled more than 162,000 mobile phones worth over 500 million yuan ($80 million) from Hong Kong over the past two years, the Beijing News said.
Half of the suspects are described as housewives who frequently travel to Hong Kong, according to another newspaper, the Southern Metropolis Daily, adding that they were paid 20 to 30 yuan in commission for each phone they brought back to the mainland
The Lanyou Shuma.com digital store, once one of the largest on China’s Taobao Marketplace, was forced to close in April by Taobao after Hong Kong authorities launched an investigation on possible smuggling of the iPhone 4S, the Beijing News said.
We told you a couple weeks back that Apple plans to open its third retail store in Beijing on Oct. 20. The new Wangfujing Street store will open at 9 a.m., but Apple’s Senior Vice President of Retail John Browett today gave press in Beijing a preview of the three-story location that happens to be Apple’s biggest retail store in Asia. Browett also confirmed Apple will open another store in Shenzhen.
Below, we get some shots of the new store’s 360-degree Genius Bars, three-story glass staircase, and more (courtesy of M.I.C Gadget):
Expand
Expanding
Close
Earlier this month, iLounge and Macotakara reported that Apple made several changes to its MFi (Made for iPhone/iPad/iPod) policy that tightens control over manufacturers producing accessories. In its report, iLounge included word about a seminar in China where Apple plans discuss its policy change with manufacturers—talking specifically about Apple’s new Lightning technology. Today, thanks to a report by TechCrunch and a picture of the seminar’s program provided to us by a tipster (as seen above), we have learned more about the seminar. The conference will be held in Shenzhen, China from Nov. 7 to Nov. 9 to talk about the new standards.
With the new standards, Apple will have a strict control over the supply of Lightning pins that help power the Lightning connectors that MFi partners could build. Apple will only supply the pins to partners that the company has vetted to make sure its standards are met. Previous teardowns have already shown that what Apple has with its Lightning cables is not ordinary dumb cable technology.
As you can see in the program, Apple has a lot on the docket for those who attend. It will give manufacturers an insight into Apple Retail, how to design Lightning accessories, and the changes within the MFi program. Apple’s engineers will also assist with Wi-Fi, AirPlay, and Bluetooth. Once Apple has approved a company, it will sell them the Lightning pins in volume. According to TechCrunch, the pricing is “very fair when you consider the advance technology.”
Last year, at its MFi program that took place Dec. 7 to Dec. 9, Apple told developers to get busy building next-generation iOS accessories compatible with Airplay and support Bluetooth 4.0. As we now know, Apple has rolled out Bluetooth 4.0 to most of its devices and wants to make Airplay a standard for audio and video consumption.
A judge in the United States dismissed Proview’s suit two days ago against Apple in the U.S., and it seems the dispute may be wrapping up soon, because the companies have been discussing a settlement amount.
A report by Sina (via the Beijing Times/TNW) claims that Apple offered $16 million as a settlement for the iPad trademark in China, which Apple was duped out of prior to the product’s 2010 launch. Apple bought the Chinese trademark using secret subsidiary IPAD, but the Taiwanese arm of Proview had no right to sell it, because it was a separate entity from the Chinese company that owned rights to “IPAD” in China.
Proview China is now in bankruptcy to the tune of $63 million to Chinese banks and others; so $16 million is a long way from bringing it back from the dead. However, the creditors may choose to take what they can get.
By the way, the new iPad is conspicuously late to China—with some even wondering if it is because of the trademark dispute.
Apple’s iPad trademark dispute with cash-strapped display company Proview has continued to drag on despite the Chinese company claiming it was in negotiations with Apple as recent as February. Today, several reports suggested Apple and Proview are now involved in court-moderated mediation with senior officials who are boasting Apple could lose the right to the iPad trademark in China. The mediation would be the first confirmation of settlement talks between the two companies. The Associated Press reports:
Apple Inc. risks losing the right to use the iPad trademark in China, a senior official suggested Tuesday, as a Chinese court was seeking to mediate a settlement between the technology giant and a local company challenging its use of the iPad name… Yan Xiaohong, deputy director of the National Copyright Administration, told reporters in Beijing that the government regards Shenzhen Proview Technology as the rightful owner of the trademark for the popular tablet computers
If Apple and Proview are unable to come to a settlement in the talks, Guangdong High Court in southern China will rule over the case in the months to come. According to Deputy Director of China’s State Administration for Industry and Commerce Fu Shuangjian (via The Wall Street Journal), Proview is still the legitimate owner of the iPad trademark in the country:
“Currently, Proview Shenzhen is still the legitimate registered owner of the IPAD trademark,” Mr. Fu said. But he indicated that officials are waiting for the Guangdong court’s final judgment, after which the industry and commerce sector “will deal with the case according to law.”
An important update as a Shanghai court hearing this morning confronted Shenzhen, China-based LCD display maker Proview and Apple of California, the maker of the widely popular iPad tablet. The high-profile hearing drew more than a hundred reporters. As you know, Proview is dreaming of a multi-billion dollar settlement for rights to the iPad name in China where Apple pushes aggressively with claims it acquired the iPad trademark in 2009 from Proview’s Taiwanese affiliate for about $55,000. Associated Press this morning described a heated exchange between cash-strapped Proview, which recently filed for bankruptcy, and the Silicon Valley giant. At stake: A countrywide import and export ban on the iPad that enjoys a 76 percent share in China.
If enforced, the ban could easily disrupt worldwide iPad availability, because the world’s largest contract manufacturer Foxconn at its plants in the Chinese province of Shenzhen manufactures the tablet. Worse, it could disrupt a future iPad 3 launch allegedly scheduled for March 7 unveiling. So yeah, it is all about money.
Proview representatives presented as court evidence the company’s 2000 iMac-lookalike named IPAD (pictured on the right). The lawyers came down with all guns blazing on Apple, and said: “Apple has no right to sell iPads under that name.” The company’s CEO told reporters “both sides have willingness to negotiate,” and asserted, “both sides will submit their plans before the talks,” because an out-of-court settlement “is quite possible.”
To this, Apple responded:
They have no market, no sales, no customers. They have nothing. The iPad is so popular that it is in short supply. We have to consider the public good.
Reuters followed up with another quote attributed to Apple’s legal team:
Apple has huge sales in China. Its fans line up to buy Apple products. The ban, if executed, would not only hurt Apple sales but it would also hurt China’s national interest.
Explaining Proview has not sold or marketed its IPAD computer system in years while Apple only began selling the iPad tablet in 2010, the company said the fact essentially invalidates Proview’s trademark. Lawyers for Proview cried foul, and claimed any public good achieved through the creation of iPad manufacturing jobs in China and tax revenues should not be confused with trademark infringement:
[vodpod id=Video.16115602&w=650&h=420&fv=allowFullScreen%3Dtrue%26bgcolor%3D%23000000%26autoPlay%3Dfalse%26screensLayer.startScreenOverId%3DstartScreen%26screensLayer.startScreenId%3DstartScreen%26]
Note: A YouTube version should be up soon
As promised, ABC aired its documentary about Foxconn factories producing Apple products. In an unprecedented move, Apple decided to grant the network’s “Nightline” program full access to its Chinese supply chain, so correspondent Bill Weir traveled to Shenzhen, China to look at “iFactories,” as ABC dubbed them.
Full disclosure: Disney Corporation owns the ABC News network. The fact that the Steve Jobs Trust is Disney’s largest individual shareholder, coupled with Disney CEO Bob Iger now having a seat on Apple’s board of directors, certainly helped win the official approval from Apple. It also raises questions on a possible conflict of interest with this report.
The full “iFactory: Inside Apple” report is scheduled to air on a special edition of “Nightline” due tomorrow, Feb. 21, at 11:35pm ET/PT. A preview will air on “Good Morning America” and “World News with Diane Sawyer.” A long article that accompanies a video teaser, included above for your convenience, offers a grim description of working conditions inside Foxconn plants:
A country-wide import and export ban on Apple’s iPad that ProView is pushing for over an ongoing litigation with the iPad moniker will not be easy to implement, or at least that is what Chinese customs officials told Reuters this morning. Chinese company ProView owns the “iPad” trademark and is petitioning Chinese customs to stop shipments of iPads in and out of the country.
Foxconn manufactures the iPads in Shenzhen, China, and such a ban would disrupt global iPad supply. Another result of the legal battle over the iPad name: At Apple’s request, online shopping websites Amazon China and Suning reportedly removed the iPad until the trademark dispute is resolved. Proview is hoping to extract an estimated $1.5 billion from Apple for the rights to use the iPad moniker in China.
The plan reportedly is not working as expected, because local customs think implementing a country-wide ban on such a successful and globally popular product would be impractical, to say the least. Moreover, customs authorities are unlikely to intervene in the trademark battle, or so the story has it. For its part, Proview insists it started developing a tablet called the iPad in 2000. The company’s boss Yang Long-san confirmed the latest development to the news gathering organization:
Not content with officials yesterday confiscating iPads in Shijiazhuang over an ongoing litigation on the iPad moniker, Taiwanese company Proview Electronics is now looking to put a ban on both iPad imports and exports, according to Reuters. The company is already petitioning Chinese customs to stop shipments of iPads. Proview sued Apple last year over its “I-PAD” trademark and could seek up to $1.5 billion for the name from the Cupertino, Calif.-headquartered gadget powerhouse.
Apple is in an increasingly difficult place here. Considering every iPad is built in China (until Brazil plants go online), a full-blown export ban could disrupt the iPad business on a global scale. Proview’s legal position stems from Chinese laws that seek to prevent the sale of counterfeit goods in the country. The news gathering organization confirmed the development this morning:
A Chinese tech firm claiming to own the “iPad” trademark plans to seek a ban on shipments of Apple Inc’s computer tablets into and out of China, a lawyer for the company, Proview Technology (Shenzhen), said on Tuesday.
Proview also asked the country’s Administration Industry and Commerce to put in effect iPad confiscations in as much as 30 cities. Apple’s position in this dispute remains unchanged as a spokesperson re-iterated the official line:
We bought Proview’s worldwide rights to the iPad trademark in 10 different countries several years ago. Proview refuses to honor their agreement with Apple in China and a Hong Kong court has sided with Apple in this matter.
Apple’s contract manufacturer Pegatron Technology of Taiwan is unaware of any forthcoming labor inspections at its Asian plants because its client has not officially tipped them about labor audits, according to Chief Financial Officer Charles Lin tells to Bloomberg. Lin was reacting to yesterday’s announcement by Apple of California that the first audits in cooperation with the Fair Labor Association have started at Foxconn City in Shenzhen, China.
Pegatron Corp., a maker of Apple Inc.’s iPhones, said it hasn’t been informed of any pending inspections of factory work conditions by labor groups, a day after the U.S. company said checks would start this spring. Pegatron is aware of Apple’s corporate social responsibility policies, Charles Lin, chief financial officer of the Taipei-based company, said by telephone today. The client hasn’t informed him about any upcoming audits, Lin said.
Apple previously confirmed that audits at Pegatron and Quanta Computer, the company assembling Mac notebooks, are due this spring. The company said the results of FLA audits will be made available on its website at the end of March. In the wake of the Foxconn scandal, a month ago Apple became the first technology company admitted to the FLA. That announcement followed Apple’s release of 2012 Supplier Responsibility Report that for the first time named 156 companies currently supplying components for Apple products, which left only three percent of suppliers absent from the list.
Following the release of Apple’s “2012 Supplier Responsibility Report,” Apple announced it would be the first technology company admitted to the Fair Labor Association. The FLA will “independently assess facilities in Apple’s supply chain,” and then publish its independent findings online. Apple announced through a press release today that the first audits have officially started with FLA President Auret van Heerden and his team beginning inspections at Foxconn City in Shenzhen. Apple CEO Tim Cook said the audits are “unprecedented in the electronics industry”:
Expand
Expanding
Close
Consumer groups SumOfUs and Change.org are waging a war over the working conditions at Apple’s (and the rest of the electronics industry’s) main outsourced manufacturer Foxconn. The groups said that over 35,000 people signed their “Stop Worker Abuse” online petition in just 24 hours. Today, the groups announced they would deliver a quarter million petition signatures to Apple.
Furthermore, a protest will be staged tomorrow at 10 a.m. outside Apple’s new Grand Central Terminal retail store and representatives from both SumOfUs and Change.org promised to join the protesters. Change.org’s Mark Shields called abusive working conditions at Foxconn factories “appalling,” adding he was shocked to learn about them.
The two consumer groups are demanding that the iPhone maker release a worker protection strategy for new product releases because these are the instances “when injuries and suicides typically spike because of the incredible pressure to meet quotas timed to releases.” They are also pressuring Apple to publish the results of Fair Labor Association’s audit (to which the company willfully agreed): “Including the NAMES of the suppliers found to have violations and WHAT those violations are, so that there is transparency around the monitoring effort.” The petition (found here) opens with an interesting paragraph:
The NY Times just published an absolutely fascinating piece on Apple and why it builds almost all of its stuff in China. Go read it. Clearly some of our politicians could learn a lot from it.
The short of it is that companies like Apple simply cannot manufacture products in the United States. The cost (though it is cheaper in China) is not the reason, however. Years ago, the Chinese government subsidized building cities of factories that can hire 3,000 workers to live in a dorm per day —or 8,700 Industrial Engineers in two weeks (it would take 9 months to do this in the U.S.). Today’s gadgets require thousands of little parts that are all made in the same areas. This whole global supply chain cannot be moved to the U.S.
The most interesting tale might have been the last minute decision to make the iPhone’s display glass:
In 2007, a little over a month before the iPhone was scheduled to appear in stores, Mr. Jobs beckoned a handful of lieutenants into an office. For weeks, he had been carrying a prototype of the device in his pocket.
Mr. Jobs angrily held up his iPhone, angling it so everyone could see the dozens of tiny scratches marring its plastic screen, according to someone who attended the meeting. He then pulled his keys from his jeans.
People will carry this phone in their pocket, he said. People also carry their keys in their pocket. “I won’t sell a product that gets scratched,” he said tensely. The only solution was using unscratchable glass instead. “I want a glass screen, and I want it perfect in six weeks.”
After one executive left that meeting, he booked a flight to Shenzhen, China. If Mr. Jobs wanted perfect, there was nowhere else to go.
New screens began arriving at the plant near midnight.
A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.
For over two years, the company had been working on a project — code-named Purple 2 — that presented the same questions at every turn: how do you completely reimagine the cellphone? And how do you design it at the highest quality — with an unscratchable screen, for instance — while also ensuring that millions can be manufactured quickly and inexpensively enough to earn a significant profit?
Other notable tidbits:
Expand
Expanding
Close
[vodpod id=Video.15968071&w=650&h=420&fv=autoPlay%3Dfalse]
Earlier this week, Apple pledged to let the Fair Labor Association access its suppliers’ facilities to monitor working conditions. Even though Apple is the first technology company admitted to the FLA, the snowballing issue of harsh conditions at Far East plants will not go away with the announcement. Quite the contrary, the problem has escalated and gone mainstream, with both The Daily Show and This American Life focusing on the grim reality of earning a living at Foxconn-operated sweatshops in China.
Jon Stewart, The Daily Show host and chief satirist, remarked in an episode yesterday:
By creating a convenient ecosystem, China’s Foxconn draws in employees who earn 31 cents an hour working for 35 hours straight, thereby saving American companies money.
As you know, Foxconn (also known as Hon Hai Precision Industry) is Apple’s favorite contract manufacturer, it but also produces gadgets for Amazon, Microsoft, HP, Dell and a variety of other brands. With that said, both shows tackle larger issues that affect just about every electronics manufacturer. The last week’s episode of This American Life, the popular radio program, weighed in as well. You can listen to their free audio stream here.
Yesterday we told you that Apple’s lawsuit against Proview regarding the “iPad” trademark was rejected by a court in Shenzhen, which would make Proview the rightful owner until Apple decides to appeal the decision or settle with the company outside of court.
At the time we weren’t sure what exactly would be the next course of action for either company, but according to a new report from Financial Times, it appears Proview is attempting to block iPad sales by suing resellers in Southern China. Starting with the cities of Huizhou and Shenzhen, if the company is successful at blocking sales of the iPad there, they will then go after other Apple resellers throughout China.
Xie Xianghui, a lawyer presenting Proview, discussed the company’s new course of action:
We are starting with these two cities, and if we are successful in getting iPad sales stopped, we will consider going after Apple resellers elsewhere in China.
The Shenzhen Futian District Court will begin hearing one case on December 30, with another slated for January 7. There’s always the possibility that Apple will settle outside of the courts before then, as Proview’s financial troubles are clearly a motivating factor.
Expand
Expanding
Close
Despite Apple vowing to audit fifteen of their suppliers following accusations of pollution from Chinese NGOs, a report from China Labor Watch says 1,000 employees of a Jingmo Electronics Corporation factory in Shenzhen staged a strike earlier this week. The factory is owned by one of the world’s largest keyboard manufacturers, Jingyuan Computer Group, and happens to be an OEM for Apple, among others including LG and IBM. The Chinese Labor Watch organization is particularly urging Apple to take responsibility:
“China Labor Watch calls upon Apple, IBM and the other clients of this factory to assume responsibility for these workers’ dissatisfaction and work with the factory to improve the working conditions in the factory. We particularly urge Apple to take responsibility, as there are more than 300 workers working on the Apple keyboard assembly line.”
The workers decided to strike over management’s decision to enforce nightly overtime, adding a 6 p.m.- 12 p.m nightly shift to their regular hours of 7-11:30 a.m. and 1-5 p.m. That accounts for approximately 120 hours of overtime per month. They were also refused the right to work this overtime on the weekends, which would have required the company to pay workers double time under Chinese Labor Law. Chinese Labor Watch explains there were other concerns raised by employees as well:
Expand
Expanding
Close
The idea of a next-generation iPhone shaped like a teardrop dates back to a report published by This is my next in late-April, describing a 3.7-inch iPhone with edge-to-edge glass and striking new design shape akin to the late-2010 MacBook Air, meaning thicker to thinner from top to bottom. Piggy-backing on the story, agile Asian vendors followed up with teardrop-shaped cases. Or so we thought.
While we will ‘talk iPhone’ next Tuesday, M.I.C. Gadget reveals that an iPhone 5 prototype had recently gone missing from the Shenzhen district. “This should explain why we are seeing a whole lot of iPhone 5 cases in China today”, the publication concludes.
Much like the widely publicized iPhone 4 prototype that had gone missing at a German beer bar in California, the missing handset was camouflaged in an iPhone 4-like case (strange because the teardrop phone is wider and taller). Inside: A test model with a finalized iPhone 5 chassis sporting the teardrop design. The publication then builds on this tip by speculating that the device houses “slightly modified iPhone 4 electronics” plus the A4 chip “and even the same amount of memory”.
If this is true, then the tear drop iPhone may be the low end device, and the one inside the iPhone 4 case might be the high end.
[youtube=http://www.youtube.com/watch?v=TU7iCNIumpc]
[youtube=http://www.youtube.com/watch?v=cR4kjyfpZos]
MICGadget reports that some industrious Chinese smugglers devised an elaborate system to get iPads and iPhones across the border into the country where they were once built:
Hong Kong and Chinese customs have cracked an audacious smuggling operation that saw Apple goods ferried along a long cable straddling the border. The iPad and iPhones were transported over a small river that separates the booming city of Shenzhen from the rural northern part of Hong Kong using an elaborate pulley system. The cable was shot across the border using a crossbow [Batman?] and the Apple products were flying across at night, which store in black nylon bags. The cable was suspended to a high-rise building in the Chinese border town of Shenzhen, and goods were moved several hundred meters from a small village house located in Hong Kong
6 smugglers were arrested in the operation, 50’s iPad 2 and 50’s iPhone 4, which worth about three hundred thousand yuan (US$46,583) were seized.
It is startling that Chinese taxes make operations like this necessary, especially in the place where these things are actually produced!
Expand
Expanding
Close
Besides the extremely unfortunate loss of life, Bloomberg posts a dire scenario on iPad production laid out by IHS iSuppli this evening:
The drop in manufacturing will depend on how long the plant is closed following a May 20 explosion that killed three people and injured at least 15, according to ISuppli. The total could be even greater if the suspension of operations at the facility lasts longer than a month, the firm said.
Another Foxconn factory in Shenzhen that produces iPads may not be able to make up for the lost output, ISuppli said. The manufacturing breakdown may lead Apple to miss ISuppli’s forecast of 7.4 million iPad 2 shipments in the quarter ending in June, the El Segundo, California-based research firm said.
Not all analysts are as down with Apple Bull Shaw Wu saying there may not be cause to worry. He said in a report today that the concerns are “overdone” and that production at other facilities is being ramped up to make up for the shortfalls. He expects Apple to sell 6.8 million iPads in the June quarter.
In time-honored fashion the leaks are beginning — this picture of a case for iPad 2.0 shows a rear camera, new curves and suggests new speaker positions on the system.
Expand
Expanding
Close
