Steve Jobs and Co. have four official Apple Stores in China — two in Beijing, two in Shanghai — with a fifth opening soon to meet booming demand. That still puts Apple behind fake Apple Store owners in the southwestern city of Kunming, where trade officials have uncovered five storefronts mimicking the iconic look, logo, and layout of an Apple Store. Two have already been shuttered. What's the story behind these ersatz Apple peddlers, and why is Apple so quiet about this assault on its brand? Here, a brief guide:
What are the fake stores like?
They're "the best ripoff store we had ever seen (and we see them everyday)," says American expatriate blogger BirdAbroad, whose initial post on three of the stores went viral and sparked the Chinese mini-crackdown. BirdAbroad describes a store that was superficially a dead ringer for an authorized Apple Store, but says that when you look closer, little things "were just not right": A poorly made spiral staircase, a shoddy paint job, employee ID tags that said "Staff" instead of offering actual names, and the fact that the owners wrote "Apple Store" next to the logo — something Apple never does. Staff members genuinely believed they were working for Apple.
Why did China only close two of the stores?
According to a local newspaper report relayed by the AP, the other three stores apparently sold authentic Apple products, and thus didn't violate any laws. "There is no Chinese law that says I can't decorate my shop the way I want to decorate it," says an unidentified employee at the still-operating store uncovered by BirdAbroad. It's not clear how the stores obtain the Apple products, but smuggling iPhones and iPads into mainland China from Hong Kong is reportedly very common. "When customers ask us about maintenance, we just tell them, don't worry, these are all real from Hong Kong and they won't go faulty," one store owner, Xu, tells Reuters.
How has Apple reacted?
It hasn't, at least not publicly. One store manager says his business is applying to be an official Apple reseller, joining the 13 other Apple-sanctioned retailers in the city of 3.2 million. "If Cupertino can get the faker to enter into a licensing arrangement," says Gordon Chang in Forbes, "it makes all the sense in the world for Jobs & Co. to forgive and forget." Even an "obsessively protective company" like Apple sees the wisdom in letting such brand-diluting "Schmapple Stores" help it "build up China market share quickly before counterfeiters can enter the field." This flap also shows "why Apple is in such a hurry to open Apple stores in China," says Brian Caulfield in Forbes. If it doesn't, "everybody else will."