The Truth Behind Apple’s Suppliers in China

A big misunderstanding broke out last night when I published a tweet saying the following.

There are about 200 security officers trying to catch those who dare to sell i6 accessories.

— Sonny Dickson (@SonnyDickson) May 30, 2014

Let me straighten things out.

In HUA Qiang North Market, the heart of Asia’s electronics market, there is a building called YuanWang Digital Mall.

There are dozens of iPhone 5 & 6, iPads, and Macs. These units are either real or fake. The real units and all their accessories are being showcased and traded throughout that mall, and later sold and distributed around the whole world. Almost all the goods there are smuggled goods from HK, due to 17% tax at China customs, so smuggling to avoid the high tax is very profitable.

On May 27th, Shen Zhen Customs (Shenzhen anti-smuggling governing body), and Hua Qiang street authorities stormed the YuanWang Mall to try to catch some of those smugglers and whoever was rumored to sell Apple/Samsung/Nokia/etc units, or fake Apple/Samsung/Nokia units. More than 120 government officials are involved in this operation.

Apple may have had a role in this raid, since Apple has the ability to track all serial numbers & activations between HK and China.

There are 3 major smugglers and sellers who, combined, own 10 warehouses and 38 shops inside and around the mall. These smugglers have been caught. During these operations more than 2 thousand people witnessed the whole raid, making it a scene in the area.

Thousands of Apple and Samsung products were confiscated that day. They found out that one smugglers caught had trafficked more than 10mil RMB  (roughly 1.8mil USD) worth of goods since February 2014, and that is actually a small amount.

Apple does not want anyone to see the iPhone 6 accessories floating around the world prior to its release. Apple had already turned a blind eye on all the accessory makers for having made iPhone 5/5s/5c cases public prior their announcements.

Foxconn has said to be secretly selling old generation Apple parts or disassembled Apple parts in HK, and have been doing this for a very long time.

Below are photos of millions of refurbished iPad digitizers, hundreds of thousands of iPad batteries that are offered in bulk, and could be easily purchased in HK.

Apple and Foxconn have been dealing with high-cost recovery electronic waste recently, however, they don’t care who gets their hands on it.  This is how so many genuine iPhone 5 screens flooded the market so early.

We assume that Apple eventually wants to move all their manufacturing OUT of China to prevent leaks, and give US citizens a proper job that they’ll be proud of.