SMARTPHONES

Attack of the clones: Xiaomi and Samsung biggest victims of China’s market for fake smartphones

PUBLISHED : Wednesday, 15 July, 2015, 8:00am
UPDATED : Friday, 04 September, 2015, 1:11pm

Counterfeit smartphones abound in China, and over half are pirated versions of models by South Korean electronics giant Samsung and China’s Xiaomi, according to a new report.

Xiaomi, China’s biggest smartphone maker, shot to fame by offering what critics call cheap clones of Apple’s iPhone. Now even the clones are being cloned. 

When Chinese graduate student Mel Li’s iPhone 4S stopped working in January, she decided to buy a cheaper handset online to tide her over until she decided which smartphone to replace it with full-time.

The 27-year-old purchased an unbranded model that offered the same interface, operating system and appearance as a new Samsung smartphone, but at a fraction of the cost. 

“It’s made exactly the same as the Samsung Galaxy Note 3,” said Li.

In its report, Antutu, a Chinese benchmarking app for smartphones, found that 31 per cent of around 10 million devices using its service were imitation Samsung models. Counterfeit Xiaomi smartphones made up 37 per cent of the total.

The Mi Note, Xiaomi’s latest phablet, retails for about half the cost of a similar-spec Samsung Galaxy Note 4. At the bottom end of the spectrum, Xiaomi’s Redmi 2A smartphone can be had in China for as little as US$80.

Aware of the prevalence of unlicensed copies in China, Xiaomi hosts a verification service on its website. This allows its customers to input their phone’s security code so they can check its authenticity.

A quick search on Google brings up scores of forum tutorials informing worried consumers on how best to verify the legitimacy of their handsets.

The news comes at a bad time for Samsung. Last week, it forecast that its operating profit would hit 6.9 trillion won (US$6.1 billion) for the April-June period, down 4 per cent from the corresponding period in 2014.

This marks the seventh consecutive quarterly slide for the South Korean tech giant. Pundits point to poor sales of its Galaxy S6, the latest update to its flagship smartphone series.

Xiaomi has also taken a hit. In the first half of 2015 it posted slower than expected growth of 33 per cent. In contrast, its handset shipments jumped 227 per cent for the whole of 2014, with revenue soaring 135 per cent. 

The Chinese smartphone market contracted for the first time in six years in the first quarter of 2015, with shipments falling 4 per cent year-on-year, according to a survey by market research firm International Data Corp.

Antutu’s report showed that 4 per cent of the smartphones using its service were counterfeit Huawei handsets, and 2 per cent were fake HTC models. Huawei is Chinese and HTC is based in Taiwan.

It did not reveal any statistics about Apple’s iPhone as the survey focused on Android models.

Apple was the top smartphone seller in China in the first quarter of this year, Xiaomi was second and Huawei third, IDC reported.

READ MORE: Apple made 92 per cent of global smartphone industry profits in Q1