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Feds Seize $78M of Bogus Chinese Cisco Gear
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."
I rather doubt that much of this equipment is truly "counterfeit", at least in the usual sense of a cloned design such as the iClone. Rather, what happens is that the contract manufacturer will buy extra parts and make more units than Cisco actually ordered, and then those units go out the back door after hours. They might have illegitimate serial numbers or might be missing the authenticity stickers on some internal chips, but they are otherwise identical.
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.
Kevin Smith on Prince
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
And can I get 20 minutes of completely unsupervised access?
I'll even waive the disposal fees.
What genius figured out the Linksys stuff was actually fake Cisco Chinese knockoffs? Explains their routers intermittently dropping connections all the time. All that stupid Chinese solder and boards are screwing them up. The water on the island makes better wafers.
The attractiveness of low cost manufacturing in China seems to be inevitably offset by some other negative, whether it be the creation of instant competitors once the contract manufacturer figures out how to reach their customers' customers, or ersatz ingredients (melamine in dog food last year for instance). Remind me again, why is free trade with China such a great deal for the developed world?
Dog is my co-pilot.
when are they auctioning this stuff off..? I'd love to get me some pods together on the cheap.
Other than the brand name on the boxes being fraudulent, what is the difference between this HW and the real Cisco products? If they're even close in quality, then catching these fraudsters will move Chinese manufacturers to market them under their own brands. Then they'll just be violating patents, not trademarks (and copyrights in the manuals). But then they'll be pressured to actually create their own better ways of doing it. Which is actual progress, even if not quite as profitable as the ripoff.
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.
--
make install -not war
A generation from now: s/Chinese/American/g;
Kevin Smith on Prince
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.
It sounds like most of these Chinese counterfeiting cases have been manufacturers making exact copies of the items they were contracted to make, then selling them without the warranty, name, etc. for similar profit margins.
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 --> ???
Had actually received some of this gear unknowingly and while some of it does work...there were a few cases where that when a switch that would lose power the GBIC would not come back up in a 'no shut' state. Instead you had to console into the switch and issue a 'shut > no shut' on the interdace to get the port to come back. So while the technically do kind of work, it is not something I would recommend deploying in a mission critical switch/router.
That's the plan, man. As soon as a country starts getting wealthy and the workers aren't so desperate, take all the money and invest it in the next poverty stricken region. Wait until the first country gets poor and desperate again, then move back in. As long as money and goods are free to move between countries, but people are not, that's what we'll have.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
It could have something to do with all of the campaign contributions that come from large organizations manufacturing goods and services. Of course it could be that the general populous likes products that are dangerous, poisonous, fake, bogus and fraudulent. It's so hard to tell.
I don't believe in karma, I just call it like I see it.
This is currently a valid issue, not a "what if" scenario. Currently, atleast in the gov entities I work in, the gov is no longer purchasing IBM desktop and Laptops, well the Lenovo branded ones anyways. A while back, in some of the meetings I have attended, there was a particular briefing which discussed a particular component in a device, that apparently had no function. This was from a well known brand that manufactures it's products Taiwan.
I came, I conquered, I coredumped
You may recall the Taiwanese router vendor that put backdoors in their routers (no one every explained why that I recall). And then there's all the picture frames and thumb drives that inject viruses.
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?
Some drink at the fountain of knowledge. Others just gargle.
Look at steel. It's kind of amazing that Japan was able to import all of the raw materials, make steel and ship it to the US cheaper than it could be made here where the resources were available. Doubling oil prices will probably be good for what's left of the US steel industry.
Intron: the portion of DNA which expresses nothing useful.
Cisco has won an injunction that prohibits Huawei from selling routers in the US.
The router code is identical down to the security bugs.
The parent post hit it right on. Literally millions of chinese workers left their homes and families in the rural areas, and went to live and work in the cities where the factories are! The simple fact that they are willing to do this while US factory workers won't is what makes it worth the trouble to build factories in China.
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 areas in China, or move to some other even poorer countries where they can find the workers.
Oliver.