Feds Seize $78M of Bogus Chinese Cisco Gear 197
Ian Lamont writes "The IDG News Service is reporting that US and Canadian authorities have made more than 400 seizures of counterfeit Cisco hardware from China in an ongoing investigation that started in 2005. The most recent seizure was last Friday in Toronto, where the RCMP charged two people and a company with distributing large quantities of counterfeit network components to companies in the US through the Internet. The RCMP seized approximately 1,600 pieces of counterfeit network hardware with an estimated value of $2 million, says the report. According to another source, bogus Cisco gear from China typically includes network modules, WAN interface cards, gigabit interface converters, and less expensive routers."
Not really counterfeit (Score:5, Insightful)
It's a very difficult problem to manage unless you have trusted people overseeing the entire manufacturing operation. The amount of gross margin in Cisco gear makes this activity extremely profitable.
Re:Not really counterfeit (Score:5, Informative)
Re:Not really counterfeit (Score:5, Informative)
Say Cisco specified a 1 ohm SMT resistor that has a
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Maybe not even that; cutting out the American overlords means fat profits even if you don't change the specs at all. I heard of a case where some shoe maker, maybe Addidas but I forget, dumped their old Chinese manufacturer for a new one. But the old one just kept making the same product, just exporting it through different channels (which is obviously illegal since they were no longer authorized to use the trademark).
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And who pays list for Cisco?
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They don't exactly answer the phone with "Thanks for calling Cisco, here's our best price $xxx. What's your name again?"
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Re:Not really counterfeit (Score:5, Informative)
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In contrast to the HP Procurve equipment, which is sold with next business day lifetime warranty at no additional charge.
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So I contacted Cisco TAC - told them it was really dead. The Cisco TAC guy got us sent a new one - well as new as something like that can be - because it was obsolete and the replacement was from old stock.
I asked them how much it'll cost - the TAC guy didn't appear to care. I guess his job was to close cases and make people happy.
In
Why make *anything* in China, then? (Score:5, Insightful)
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Re:Why make *anything* in China, then? (Score:4, Insightful)
The cause of offshoring/outsourcing is not labour cost, but labour mobility: the price of labour in electronics is very low, around 5%, but you cannot do without people. Giving better salaries is not a solution. It was tried during the IT bubble but it did not work: the companies got more expensive workers but not in greater numbers, since all competed over the same number of workers, and due to the limitations on immigration the game was a zero sum game. This problem is much more grave in EU than in US (imagine needing a Green Card in order to leave California and find work in Florida) so factories are moved not only to China or Eastern Europe, but even to US.
Of course in the long run it gets you into trouble, but in order to have a "long run", the companies that moved their operations in other countries attempted to have a "short run" first: they would be already dead without the ability to expand.
MOD PARENT INSIGHTFUL (Score:2, Insightful)
When the workers in China got rich enough (relatively speaking) that they are no longer willing to leave families behind, you will see those factories either spread to the rural are
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Because the CEO wants to save a buck and would rather take that risk of China getting/understanding how to build last years model. Instead of paying the $10 an hour to the American worker where he can pay 10 employees $1 an hour (yes it is just an example I don't know the exchange rate). It all comes down to greed. It looks good on paper but in the long run it gets you into trouble.
Besides that, by the time the bad news comes around, he's deposited his bonuses, sold his options, and deployed his golden
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Because making those products in US, Germany, Japan or Taiwan (BTW both used to be doing the same things as China,) will not be price competitive; production in other 3rd world countries will have the same or worse problems. For the companies, all the extra costs and troubles still cannot negate the benefits. For the buyers, prices are always an important consideration. Quality is not the only criterion and is hardly quantifiable. Especially for electronics, my new laptop will be worth practically $0.00 in
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You're the only one who got it right (Score:2)
There's some rationality to it, but I think this kind of mindset is what drives executive salaries stratospheric -- *they* know what they're doing is long-term negative, so they need to be paid "up front".
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The thing I find most painful about the short-term profit drive is that there isn't any way I can think of to break it, because it's not about infor
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Its got a bit of the tragedy of the commons to it -- the only way it will end is when the commons is overgrazed and everyone's flock starves.
The big problem is that as business has become international, business leaders kind of stopped belonging to anywhere -- their loyalty is to the transnational meta-nation of "corporate executives" so they don't feel any sense of responsibility to any "p
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As a result I've started thinking of it as being like a herd of deer being chased towards a cliff by a wolf. Each deer knows that if they all stopped, a maximum of one would be killed, and every deer knows that if they keep going they're all going to die... but nobody is willing to stop first.
The idea of
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But -- I doubt that Brad Pitt or Lindsay Lohan take off their shoes at the security checkpoint or hunt for laptop outlets among the vinyl chairs at the gate like you and I do. I'm
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Remind me again, why is free trade with China such a great deal for the developed world?
Screw all the people who say "those evil CEOs want an extra dollar in the stock benefits" or whoever the current bogeyman is.
Trade with China is good for the developed world because they can make some things a lot cheaper than we can. Practically everything we buy is cheaper, either directly or indirectly, because of Chinese production.
The higher standards of living everyone enjoys comes with the cost of some do
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Except that it's proving to be a false economy lately. Just ask the former dog owners. Or for that matter the parents of the dead kids in Panama.
The real question is after the losses from counterfeiting and the extra expenses to make sure toys and healthcare products are free of GHB, lead, ethylene glycol, melamine and anything else that nobody in their right mind would put into either, is it still a better deal?
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Re:Not really counterfeit (Score:5, Interesting)
It isn't just that. In any other tech industry you would see 'legit' clones, i.e. ones that were sold AS clones, with someone else's name on it. But you can't do that with Cisco gear. If you put any non-cisco stuff in one it voids the service contract. No service contract no bug fixes. Unpatched gear is an accident waiting to happen.
Personally I'm happy as hell. We don't have much Cisco gear and I didn't buy it (donated) but it has been enough of a PITA that I absolutely HATE Cisco. When I had to scrounge up some extra ports I certainly hope I managed to get the knockoffs and avoid giving those rat bastards one cent more than absoluteley required. Had to put the unit back under a service contract before I could get a IOS with device drivers. Tell me, who still charges for (basically) device drivers and security fixes?
Adn their hardware is so pathetic. Open one up sometimes and check out just how little is inside one. Ponder just how little they are paying those Chinese contract manufacturers for the hardware they then jackup to such stupid prices. And don't tell me it is the software either, they used to just be running BSD with the serial numbers filed off and with the volume they do they can afford some software devels. As for support it ain't in the price of the product, they sell that as a extra and for all intents and purposes only to those who have also paid em a crapload to get their people certified.
By being able to milk hardware, software and support they probably make Gates & Balmer jealous.
Re:Not really counterfeit (Score:5, Insightful)
(hint: it's around 80$. same cable that comes with every power supply)
Re:Not really counterfeit (Score:5, Informative)
I can see the spam mails coming... (Score:2)
BUY TWO, GET A THIRD FREE!
www.cheapciscocablesforsale.com
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So how is that not counterfeit? By definition counterfeiting is an imitation that is made with the intent to deceptively represent its content or origins. Isn't that precisely what happened here?
Well, true, but counterfeit generally has the connotation of being of lesser quality or not working at all. I mean there is a bit of a difference between a cheap lookalike knockoff, and a physically identical unit that was merely not authorized. Most people think of the former when the hear the word counterfeit. Of course, nobdy would argue that money produced after-hours in the same way is not counterfeit, but people seem to apply a different standard to counterfeit devices.
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So how is that not counterfeit? By definition counterfeiting is an imitation that is made with the intent to deceptively represent its content or origins. Isn't that precisely what happened here?
Counterfeit usually implies a knock-off product meant to be mistaken for the real thing. The "quality" of a counterfiet is determined by just how hard it is to distinguish. Most counterfiets are just good enough to pass a casual inspection.
The not-Cisco gear is fully identical right down to the last detail. In
Re:Not really counterfeit (Score:5, Funny)
The dangers of outsourcing (Score:2)
And this is where outsourcing becomes so viciously dangerous. When considering outsourcing, it's important to limit it to only those areas that are not "core competencies". If your core business is to manufacture hardware, it's just stupid to outsource manufacturing hardware. If you're in the business of hostin
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If the DVD is identical to the original, same packaging and the only difference is I'm not paying universal or paramount big $ well good times for all.
DVD's are somewhat cheaper now but perhaps the same thing will happen for blu-rays (sorry but 40$ AUD (35$ US) for a movie is just unreasonable, HD or not)
Drop DVD's to 12$ AUD (9$ US) and Blu-ray to 25$ AUD or 20$ US (approximately) and sales will swing up.
Their loss, I'll just go without for the moment.
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Judging by other types of counterfeits coming out of china, there probably are more traditional counterfeits of networking equipment coming out as well. By this, I mean, generic hardware put into a very convincing Cisco shell and stamped with the Cisco logo. For example, there's the iPhone ripoffs everyone's probably familiar with, as well as high-end guitar ripoffs which wouldn't fool a musician in person, but might fool an amateur, especially over the net.
I can't help but suspect that those who are apo
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The reason I am asking this is to find out what Cisco equipment is really worth.
I am assuming that this knock off equipment is identicle to Cisco, at a small fraction of the price, (aka what the equipment is really worth, minus the obscene markup Cisco puts on.)
maybe $"78M" that Cisco charges is really only worth
Where is this warehouse, (Score:2, Funny)
I'll even waive the disposal fees.
Doesn't take Sherlock Holmes (Score:2, Funny)
So, um... (Score:4, Interesting)
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when are they auctioning this stuff off..?
"Counterfeit" (or in this case, unlicensed) goods are usually destroyed.
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You're missing the whole point of this. Having these products in circulation is extremely detrimental to Cisco. Not just in terms of lost sales, but also that people will be calling in for tech support, attempting to get warranty replacements, putting it up on eBay, etc. Even if you donate it to a charitable cause it is costing them real money in a direct sense, and also tarnishing the brand and piss
Re:So, um... (Score:4, Insightful)
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I didn't say it's not a waste. I said you're missing the point.
What's the Difference? (Score:5, Insightful)
If Chinese counterfeits can get marketed under their own brands, we'll actually have some price competition. And maybe when some American companies get killed by their OEM factories like Japanese manufacturers did to cameras and consumer electronics in the 1970s-80s, we'll see some more caution in shipping all their tech expertise overseas to create their competitors. They might be more likely to consider the less immediate costs of outsourcing from a country where the law (usually) protects things like intellectual property, contracts, labor and the environment.
Or maybe every generation is doomed to watch America squander its hard-won tech leads for the sake of a few years of cheap manufacturing that then eats the parent for lunch.
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Huawei already does that. (Score:2, Interesting)
The router code is identical down to the security bugs.
Heavy Gear (Score:2)
It's easy to identify this bogus gear in the wild. It's really really heavy, because it's made of lead.
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Ever try to lift a genuine Cisco into a rack without a jack?
Prefered Trade Status (Score:2, Insightful)
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If the US suddenly stopped trading with China, it would lose access to 320 billion/year of production, and ramping up to that production level would take a while possibly sending the whole of US into a new depression. China on the other hand would lose access to 60 billion/year of trade, most of which it could replace locally or get from other trading partners. Not being able to sell their products i
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Covering up the cost of consumer goods is a great way to hide the declining strength of the dollar. "Oh, the dollar just dropped again. It's ok, we'll offset that by importing even cheaper crap."
-b
It was easy to identify the fakes (Score:2)
yeah, right. (Score:5, Insightful)
No, I think the goal is to protect the corporation. Not that I completely object to these actions, just that it's getting pretty tiresome to see the police always trotting out the public safety angle.
big software thefts in past too (Score:2)
Was it just non-sanctioned boxes or IP theft? (Score:5, Interesting)
How much of this is the manufacturer just building more than what they were supposed to, and how much of it is actually theft of intellectual property? I remember reading that the Soviet Union would go the IP theft route...obtain a computer from another country and totally reverse-engineer it so they could use a similar design. My bet is that these manufacturers just want to make more money and not necessarily use the same quality parts. (If you're building 1000 routers, the difference between a $10 transciever and a $100 one is big, for example. How worried should we be that, say, the manufacturer has reverse-engineered IOS and put it into their own gear?
Either way, if my business was based on building clever hardware, I'd be worried about outsourcing the manufacturing to anyone, let alone a different country. However, there is absolutely no way to stop people from demanding cheaper goods. It's at the point where people are haggling over a few cents -- we're just addicted to low prices.
I'm generally not one of these protectionist, "keep America working" types, but I can't see a good way out of this situation. All the scenarios are bad:
- Go to war with China or cut off trade completely in some other fashion --> Huge price increases and emergency ramp-up of domestic production --> possibly a bad recession.
- Continue as-is --> More poisoned or cloned merchandise and IP theft --> eventually a very bad situation for us.
- Try to get China to comply with environmental and IP laws --> ???
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I remember reading that the Soviet Union would go the IP theft route...obtain a computer from another country and totally reverse-engineer it so they could use a similar design.
I recall reading something like that too, only it was a bit more blatant. Along the lines that careful examination of a supposedly Soviet made CPU had "Copyright Intel" buried in the guts of it.
This isn't what I originally read, but here's a reference: http://www.cpushack.net/soviet-cpus.html [cpushack.net]
Some gear doesnt work (Score:5, Informative)
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That happens sometimes on gear you buy direct from cisco, too. The difference is that, if you're legit, you can call TAC and they'll send you replacement GBICs & SPFs.
But then, I guess it might happen more often with some of the counterfitters. And there's no way to know if you're getting 100% cisco-like (except legality) stuff, or the cheapest possible knock-offs.
Dumb question but need to ask .... (Score:2)
Not that I want to buy it - just curious - can they make something that can be passed off as working hardware?
If they can - that's kinda impressive IMHO
Free fake Viagra with each router purchase! (Score:2)
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If yes, then, yeah, it does.
cisco opened the door for it... (Score:2)
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Makes one wonder ... (Score:5, Funny)
Re:Makes one wonder ... (Score:5, Interesting)
-nB
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ttyl
Farrell
Or has backdoors and viruses (Score:3, Interesting)
If someone is producing un-lic gear why not pick up a few more bucks on offer to add compromises.
Why not go cheap on the capacitors or the solder? not like it will hurt your brand rep.
Not saying it happens but why not?
Re:Or has backdoors and viruses (link) (Score:2)
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This one [ebay.com], for example, is very likely counterfeit. It's a real 1000baseSX SFP, but it's not a genuine Cisco product.
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The fact that this is from China is not the point, even if it is (sounds likely, IMO). That it *is fake* is the point - who cares where it comes from, apart from some xenophobic, er, xenophobes?
From TFA[1] - note the names involved - Todd Richard, Michael Edman, Robert Edman.
Sound Chinese to *you*??? Didn't think so.
When *in* China, in my experience, fake electronics is openly admitted as fake. They don't mind you buying the real stuff, but it'll cost more and take longer to get. That some foreigners
Just so you know (Score:5, Funny)
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A generation from now: s/Chinese/American/g;
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And I'm pretty sure us Europeans probably tried to make copies of some cool stuff that came from the East at one stage.
Europeans copies (Score:2)
Noodles, fireworks, compass, paper. (We got it from Chinese)
Geometric motifs on old Greek pottery, mythological chimera creatures in old Greek stories (Got it from Pheonicians and other middle east civilisation)
Modern mathematics (We got it from Arabs during middle age. The irony is that themselves partly got it from old greek sources).
etc.
Civilization development is a long story of differ
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(Also consider, 'V' is half an 'X', 'L' is half a (squared off) 'C'. Okay, that doesn't work for 'D' and 'M', but...)
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No.
Fake cables.
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Like it or not, IOS has had a few over the past 10 years that should be applied.
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Re:This would be good for spying (Score:5, Interesting)
Made Where? (Score:2)
Let me make a guess here... It's the same stuff, just without the right paperwork or import tax/fee applied. Kind of like how they claim "Grey Market" versions aren't real despite being from the same company in China.
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hey, kdawson...tip:
kettle calling the pot, eh?
karma: excellent, w/flexibility beyond steamed
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Err, why? In 2 years when you have sunk ~50 bucks into shitty power supplies, my reasonably priced one will still be running, with more years left on it.
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It's really hard to buy non-Chinese, let alone