In a busy street in Shenzhen, China, known for being the center for electronics manufacturing and sales, over thirty stores that carry Apple's iconic logos are selling pre-orders for the upcoming iPhone 6s. The stores look very much like the signature stores of Apple, with staffs wearing blue shirts with the Apple logo and Apple devices for sale displayed.
However, Apple only has one official store in the city, along with five authorized dealers. Most of the outlets in Shenzhen are fake Apple stores, all of which are taking advantage of the massive Chinese demand for the iPhone that has become a status symbol among the well-off members of the population.
While the stores are not real Apple stores, the products that they are selling are genuine Apple devices, Reuters noted. The rapid increase in numbers of such fake stores is driven by China's seemingly insatiable demand for the iPhone, which Apple has enjoyed to the tune of over $13 billion in revenue in the third quarter, double compared to the corresponding quarter in the previous year.
A clerk from one of the unauthorized stores, which opened only a couple of weeks ago, said that there are lots of "silly people" in the country that are fine with paying extra just to be able to acquire a new iPhone before everyone else, underscoring how massive the demand is for the iPhone 6s and why fake stores are popping up in Shenzhen. These stores are taking advantage of the demand by acquiring devices from authorized channels and then selling them for as much as twice the price to customers who want to purchase the device immediately.
The devices that the unauthorized outlets are acquiring come from official channels in China, the United States and in Hong Kong, where the gadgets can be smuggled across the border, according to a store staff.
The prevalence of fake Apple stores could be partly attributed to the inadequacy of official retail stores in China, where Apple only has 22 official stores for the whole country as of this third quarter. In comparison, the company has 53 stores just in California.
Still, there are analysts who believe that the fake Apple stores are actually good for Apple as brand awareness for the company is improved. There is the risk, however, of Apple losing control of the management of its brands over the long term.
