China is, after all, the land of counterfeit Apple stores, although admittedly, once the fake Apple stores in Kunming (in southwestern China) were publicized, Chinese authorities did crack down, on at least some of them.
In this case, the Shanghai Daily reported on Thursday that authorities in the city have arrested five people for making and selling counterfeit iPhones. Approximately 200 iPhone clones were discovered during the arrests.
Those arrested were part of an organized gang that purchased components for the devices from Guangdong in southern China, and then assembled the fake phones in rented apartments in Shanghai.
Some of the parts were in fact genuine, with the total cost to make a clone amounting to about 2,000 yuan ($313). It was sold on the grey market and on the Internet for around 4,000 yuan ($626), which is only a few hundred yuan less than a genuine iPhone.
What's interesting is that the clones were actually pretty good, as clones go. According to the report, the counterfeits had the same functionality as the genuine article, but had a shorter battery life.
One officer was quoted as admitting that "It's really hard for customers to distinguish the fake ones from the genuine ones."
Counterfeiters sometimes don't even wait for a device to launch. We recently reported on the "hiPhone 5," a clone of a device that doesn't even yet exist in publicly consumable form, the iPhone 5.