A massive crackdown at U.S. and European airports during two weeks in December yielded some 360,000 fake electronic components worth $1.3 billion, including phony Intel chips and about 40 other major brands. The raids were announced last Friday.
Such high-visibility busts mask the difficulty in stopping counterfeit components.
The problem, in a word, is: China. Murky and Byzantine supply chains, lax enforcement of weak intellectual property laws and an outlaw manufacturing culture all contribute to widely available fake PC components mixed together with legitimate parts in the PC components supply chain.
China is the world's leading manufacturer of, well, just about everything. And it's also counterfeit central -- more fake products of all kinds come from China than from the rest of the world combined.
The growing counterfeits problem is the dark side of the incredible cheapness of PCs these days. The driving force is consumers and businesses who view PCs as commodities to be purchased based on price, rather than quality and reliability. Declining margins force OEMs to seek ever cheaper suppliers, which in turn seek out less expensive components. Often, the cheapest part is the fakest part.
It's possible to buy a fully counterfeit PC and think it's original equipment. The Alliance for Gray Market and Counterfeit Abatement (AGMA) says one in ten IT products sold is fake. But even a computer sold legitimately by a brand-name outfit might have a counterfeit motherboard. And even if the motherboard is real, various chips and parts on that board might be fake.
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Some counterfeit parts fail spectacularly -- such as fake laptop or cell phone batteries that explode, catch fire and send people to the hospital. But most may simply fail prematurely, reducing overall reliability. Fake networking and other equipment may compromise security.
No company -- not even the giants -- can track down and verify the authenticity of every component. Testing is both extremely expensive and very time consuming. And a typical PC contains thousands of counterfeitable parts.
When we think of counterfeit components, we imagine copycat parts being manufactured. But another problem is re-labeling. When a part is upgraded to a new version, for example, unscrupulous distributors convincingly re-label the old part to look like the new one. Sometimes huge batches of legitimately manufactured but defective parts are purchased, relabeled, then sold without the knowledge of the manufacturer. In other cases, products are modified, then relabeled. For example, a chip might be "overclocked," then sold as a higher-speed version.
In a few Asian countries, including China itself, counterfeit products are easier to get in some cases than the real deal. In the U.S., the most likely source for fake goods is no-name online stores that undercut everyone else in price. Even smaller brick-and-mortar companies can unknowingly buy fake parts. But phony products, or quasi-legit products with some fake components can show up just about anywhere, including the largest electronics stores.
You can minimize the risk of buying shoddy fake PCs by always buying from a reputable company, rather than an online store you've never heard of or an auction site. Be especially wary of online sources with radically lower prices than everyone else. And don't buy on price alone. Check for reliability ratings, which is ultimately the best evidence for the ability of a company to control its supply chain and use authentic components.
The ugly truth is that you can never be 100% certain that any PC you buy contains all legitimate components. But you can minimize the risk by shopping for reliability, not just low price.