Electronics counterfeiting is on the rise and your company may be at risk
2019-04-16 | 4 min read
The availability and circulation of counterfeit electronic products is on the rise. In a recent blog post, “6 Tips to Avoid a Costly Counterfeit Mistake”, I shared steps you can take to avoid this menace. Since then, I've seen a flurry of reports about counterfeit electronics which reminded me of the importance of purchasing from certified sellers. We live in an age where people can copy anything, not just Gucci bags.
For example, a recent article on counterfeiting on Quartz got my attention and highlighted just how damaging and costly the problem is. In the article, Quartz Deputy Special Projects Editor Alex Ossola wrote about a scheme first reported in the Oregonian newspaper in which two Chinese men attending college in Oregon allegedly used counterfeit phones to scam Apple into repairing or replacing them, then reselling the original phones in China for large profits. The financial impact is staggering. For example, one of the students is associated with 3,069 repairs and a loss of $895,800, according to prosecutors.
This case illustrates how costly a mistake such a purchase can be if you don’t buy products from the original equipment manufacturer or fail to take the necessary steps to verify the product was built with original components.
In a piece for EPSNews, Barbara Jorgensen stresses that technology advancements have contributed to the counterfeiting problem, “… electronic components can now be cloned so well that they cannot be distinguished from the genuine article.” She goes on to say that counterfeiting transcends technology as “... procurement and supply chain practices also contribute to the proliferation of fake devices.” Further, Jorgensen maintains that there’s “no silver bullet solution” for counterfeit electronics and that inauthentic components are typically recycled substandard devices or parts that were altered to make it look like something they are not. Notably, Jorgensen writes, “Counterfeiters most often target high-value components, many of which are destined for the defense, aerospace, automotive and medical industries.”
And that’s a potentially huge problem. By targeting high-value components, counterfeiters are impacting customers and putting human lives at risk by compromising the performance of electronic designs in aerospace defense and medical applications. Notwithstanding safety concerns, the costs in time and money to manufacturers are dramatic.
It’s not hard to see how buyers of electronic products can get scammed by not being able to detect whether a product is counterfeit. For example, take the image that accompanies this post which shows the inside of a smartphone. You can see how difficult it would be, even for a trained eye, to know which components are counterfeit. This holds true for electronic test equipment as well.
Rewind to one of the tips in my previous post on this topic: “know your seller” or “only buy from an original equipment manufacturer”. This will give you confidence the product was repaired with certified replacement parts and tested to verify the published specifications. How do you know the supplier is a certified re-seller? You can ask them for proof.