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NewEgg Confirms Shipping Fake Core i7s

adeelarshad82 writes "After originally rejecting the story, online retailer NewEgg confirmed that a shipment of Core i7s were indeed fake, and apologized for the affair. NewEgg has also broken off its relationship with IPEX, the supplier of the phony lot. The retailer said that it has already contacted affected customers and would continue to reach out and replace the counterfeit parts. We discussed the fake Core i7s over the weekend."

40 of 314 comments (clear)

  1. Counterfits are everywhere by colin_faber · · Score: 4, Insightful

    Want to find even more? Try buying some flash on ebay sometime.

    1. Re:Counterfits are everywhere by ILuvRamen · · Score: 4, Insightful

      This isn't memory chips. This is high end, new intel processors. I've never heard of someone faking processors ever. It just seems completely insane. I can't wait to find out who made these and where and how they ended up "in the line" to newegg. It probably wasn't the intel factory and nobody at newegg's supplier would be stupid enough to purposely try and rip them off with something that would so obviously get caught. That's a great way to destroy your own business! So that begs the question...how many damn people get these processors on the way from Intel to Newegg? What a waste of time and money if it's anything but Intel -> distrubutor -> Newegg. I especially don't want to pay an extra $20 for my processor to have it shipped to 8 different people first, one of which decided it was a good idea to add in or swap out some fakes. Time to cut out the middleman!

      --
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    2. Re:Counterfits are everywhere by fuzzyfuzzyfungus · · Score: 4, Insightful

      What is interesting about this case is that the processors in question were totally fake, just rather crude physical models of processors.

      Much more common in tech related gear is partial fakery. The classic flash memory trick is 256MB(or whatever the value) of actual flash(and probably bottom bin stuff, at that) with the formatting or firmware claiming to be 4GB(or whatever the larger value) and doing various things certain to make the customer sad when you write more than 256MB to the device. If you get lucky, you'll get an actual 4GB of bottom-bin crap, with an "OMG LExar high speed!!11!" sticker on it.

      With CPUs, basically no counterfeiters have the technical capability to produce plausible fakes from scratch for less than intel or AMD can produce the genuine article. However, there is a long history of selling overclocked and remarked low-end parts as higher end ones. That has become more difficult these days(with multipliers locked on all but the most expensive chips, you really can't overclock without the connivance of the motherboard. Intel's fancy new power-control microcontroller probably makes it even trickier). However, there is a cute way of getting around that: Modifying CPUs is hard and expensive. You need careful technique and serious rework kit. Basically not worth it. Modifying a motherboard's BIOS just a bit, to change the values that it reports for certain processor related parameters and maybe does some silent overclocking, is within the reach of a few decent software/firmware engineers. Thus you do sometimes see for sale(usually aimed at unscrupulous small computer shops, rather than retail users, CPU + motherboard combos consisting of a cheap CPU(bottom of whatever the range is at the moment) and a none-too-exciting motherboard with a BIOS hacked to claim, in all visible ways, that the CPU it is paired with is actually a much faster and more expensive unit.

      Frankly, I much prefer complete fakes. They are a nuisance, certainly; but they are immediately obvious on inspection. The dangerous fakes are the ones of commodities where quality and realness are matters of degree, rather than binaries. Real/Visibly just a crude model is easy. 4GB/512MB+firmware lies can easily take some data loss to discover. Real/cheap under-specced capacitors were used, resulting in a higher 3 year failure rate can take ages to diagnose. Real/diluted to 25% of its actual dose and sold as real can get people killed and encourage drug resistance in various nasty pathogens.

  2. Caveat Emptor by Nefarious+Wheel · · Score: 4, Funny
    "But... if you can't trust the Government, who can you trust?"

    - Yahoo Serious, Young Einstein

    --
    Do not mock my vision of impractical footwear
    1. Re:Caveat Emptor by Etrias · · Score: 5, Funny

      I'm not sure quoting Yahoo Serious will get you +5 Funny. Maybe +5 What the Hell?

    2. Re:Caveat Emptor by spun · · Score: 5, Funny

      "But... if you can't trust the Governments of the world, who can you trust?"

      FIFY

      YEAH! I know it by heart! You got a problem with that?

      No sir! Anyone who will admit to knowing Yahoo Serious by heart is a tougher hombre than I.

      --
      - None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
    3. Re:Caveat Emptor by irieken · · Score: 5, Interesting

      The fact that such obviously counterfeit parts made through Newegg's supply chain is a little bit unnerving... I know that Newegg said that these were "Demo Boxes"... but from the video that I had seen, these boxes included badly made tamper-evidence stickers and holograms. This leads me to wonder if "functional counterfeits" of Intel/AMD processors have been sold by Newegg.

  3. Glad Newegg confirmed they're fake! by Dragoniz3r · · Score: 5, Funny

    It was a little up in the air there for awhile!

    1. Re:Glad Newegg confirmed they're fake! by c++0xFF · · Score: 5, Interesting

      Depends on the demo.

      Chip manufacturers will often give away defective chips as demos to those thinking of using them in circuit boards. Non-functional demo chips are used in the design phase as the boards are laid out and the first parts are placed.

      Imagining wasting a working chip just to find out if you're soldering things on correctly.

      Partially-functional chips (might work but still failed testing for obscure reasons) are also used as demos for building prototype boards.

      Neither case applies for NewEgg, however.

    2. Re:Glad Newegg confirmed they're fake! by petermgreen · · Score: 4, Insightful

      They were leaning on that "oh, our bad, we got some 'demo units' by mistake" excuse pretty hard.
      My guess is they were just passing on what thier supplier had told them until they could prove otherwise.

      It's kind of a difficult position to be in. Newegg probablly didn't want to lie but they probablly didn't want to be publically seen as doubting thier suppliers either until they could prove that the supplier was indeed shipping fakes.

      --
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    3. Re:Glad Newegg confirmed they're fake! by Mr.+Freeman · · Score: 4, Insightful

      MARKETING demos, not engineering demos.

      The marketing team doesn't need to pull out the processor, install the HSF, etc.
      They just have to look at the box and see if the packaging is appealing. You don't need functional equipment for that, you don't even need dead equipment for that, you just need something that looks like the product.

      --
      -1 disagree is not a modifier for a reason. -1 troll, flaimbait, redundant, overrated are NOT acceptable substitutes.
  4. NewEgg handled it well, by SpazmodeusG · · Score: 5, Informative

    Newegg were on top of this pretty early.
    They never denied there being a problem although they took a day to figure out what was happening.
    They have already apologized, announced they are sending out replacements and announced they are getting a new distributor a couple of days ago.

    1. Re:NewEgg handled it well, by Anonymous Coward · · Score: 5, Insightful

      True, that's an amazing amount of professionalism and quick action on their part. Pity shame that for some Slashdot readers, that won't be enough, and they won't be happy until they see Newegg executives' heads on pikes, even if it wasn't their fault. Mmm, tasty, frothy bile...

    2. Re:NewEgg handled it well, by noidentity · · Score: 4, Insightful

      Hell, I've never ordered from NewEgg, but they're the first place I go for reviews, and to leave my own reviews of products. I haven't found any other "review" site that isn't mostly ad-laden crap and pages with the title "Reviews of ", only to be empty and say "Be the first to review !".

    3. Re:NewEgg handled it well, by John+Hasler · · Score: 5, Informative

      > It was only after they were called out on that they owned owned up to
      > shipping counterfeit units. Who knows the rational for that, maybe it was
      > just ignorance or whatever.

      When they said that the junk was demos shipped by accident they were repeating what their supplier told them. Would have been better to have just said "We acknowledge that they are real will replace them, but we are still investigating" until they heard from Intel. Still, they handled it fairly well. The important point is that they did not at any point try to deny that there was anything wrong.

      --
      Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
  5. Re:New Egg by Etrias · · Score: 4, Insightful

    I've bought a lot of stuff from Newegg and they've been really good. They often get good marks for their RMA policy and returns on DOA equipment. Looks like to me they took the right steps here including stopping the relationship with the supplier who gave them the phony i7s and working to replace the ones that went out. There's nothing here that would prevent me from shopping with them again.

  6. D&H Distributing by ptbarnett · · Score: 5, Informative
    HardOCP was apparently the original source of the allegation that D&H Distributing was the source of the counterfeit CPUs. They have since apologized to D&H, claiming that their source of information was someone inside NewEgg.

    Counterfeit Intel CPU Saga Comes to a Close

    At no time did HardOCP speculate as to what company was supplying the counterfeit processors to Newegg. Our source that informed us of the supplier being D&H Distributing came from within Newegg's organization. We belived the information to be accurate and reported it to our readers. Newegg is stating that IPEX shipped it the counterfeit processors. I am not sure as to why we would get conflicting information, and we will further investigate that.

    At this time we offer our apologies to D&H Distributing for naming it as the supplying distributor. HardOCP was simply reporting the information that we believed to be accurate. We would NEVER "speculate" on something of this nature, as there is NOTHING for us to gain by misinforming our readers. We will be investigating further as to why we were misinformed on this detail.

    1. Re:D&H Distributing by bfagan · · Score: 5, Insightful

      This is exactly why trustworthy reporting outlets try to verify sources before reporting as fact. However, this becomes difficult in this time of now, faster, beat the other guy, instant publishing.

    2. Re:D&H Distributing by Klinky · · Score: 4, Informative

      I am not a fan of HardOCP, once they were posting eBay auctions on their front page from one of their sponsors as being a "Hot Deal", specifically advertising the starting bid price as though it were the actual price of the product being sold. Misleading big time, this was cross posted into their Hot Deals forum as well. I posted a message on their forum asking when did eBay auctions suddenly get allowed into the Hot Deals forum(the rule previously was that eBay auctions were not allowed at all). I got banned for "thread crapping in a sponsors thread". Glad they value their sponsors misleading advertisements over their readers.

  7. Re:Glad by Konster · · Score: 5, Insightful

    Welcome to the entitlement mindset.

    Newegg is doing their share by rush shipping replacements. This whole affair isn't their fault and they got on top of the situation quickly enough, what more do you expect?

  8. Re:Lost customer by maxume · · Score: 5, Informative

    They acknowledged that they had shipped non functional units on Friday:

    http://twitter.com/Newegg/status/10050889498

    They probably would have done better to say less, but they never denied the issue entirely.

    --
    Nerd rage is the funniest rage.
  9. Re:fake fakes? by tnk1 · · Score: 4, Insightful

    Newegg has to track outgoing inventory to prevent internal theft, so it is a good bet they probably associated an inventory item with an outgoing order. So, if they know which order the customer is returning, they can probably trace it back to the original supplier in some manner. If they have a good tracking system, they could probably bring up that detail immediately.

  10. Re:BS by characterZer0 · · Score: 5, Informative

    According to that article Newegg did not threaten to sue, Newegg's supplier did.

    --
    Go green: turn off your refrigerator.
  11. Re:Glad by MarkvW · · Score: 4, Interesting

    The CONTRACTUAL entitlement mindset is a VERY good thing. Commerce depends on it.

    Parent is naive. Corporations will try ANY legal argument to get money from consumers and the government. The idea that a citizen should foreswear such BS entitlement arguments while they are exploited by corporations that freely make (and benefit from) them is ridiculous and absurd.

  12. Re:What about the legal threats? by richardellisjr · · Score: 5, Informative

    That wasn't NewEgg, one of their suppliers (not the culprit) threatened to sue.

  13. Re:BS by eepok · · Score: 4, Informative

    Read the article you linked. It's the distributor D&H that these sites accused without evidence and as such it was the D&H lawyers that sent the cease and desist. As it turns out it was a completely different distributor (IPEX).

    "A company called D&H Distributing doesn’t consider it legitimate for the free press took umbrage to this. In fact, the legal beagles over at D&H Distributing got so worked up over the horrifying gall and chutzpah of Icrontic and HardOCP for daring to ask a question that the company slapped both publications with a “cease and desist” order.

    Sent by the lawyers representing D&H, Creim Macias Koenig & Frey, it reads in part..."

  14. Re:BS by bem · · Score: 4, Informative

    Your link says that D&H, not Newegg threatened legal action.

    Considering that D&H did not sell the fakes to Newegg, well, they are justifiably upset that people are wrongfully blaming them.

    IANAL, so I don't know if they have an actionable complaint, but your link doesn't show a Newegg legal threat, and, again, D&H is understandably pissed off that they were blamed when they had nothing to do with it.

  15. Re:After following this.... by eepok · · Score: 4, Informative

    If IPEX was tossed out, I'm guessing it was someone at IPEX who was swapping processors out for dummies (for sale elsewhere, I assume) and then sending the fakes to Newegg.

  16. Re:Glad by Spewns · · Score: 5, Funny

    Welcome to the entitlement mindset.

    And rightfully so.

  17. Re:BS by Mr.+Sketch · · Score: 4, Informative

    Did you even read that article you linked to? It says that the legal threats came from a company called D&H Distributing that the sites claim sold the counterfeit equipment to Newegg:

    In fact, the legal beagles over at D&H Distributing got so worked up over the horrifying gall and chutzpah of Icrontic and HardOCP for daring to ask a question that the company slapped both publications with a “cease and desist” order.

    Sent by the lawyers representing D&H, Creim Macias Koenig & Frey, it reads in part:

    “It has recently been brought to our attention that you are responsible for publishing on the internet, and specifically on your websites, untrue statements respecting allegedly counterfeit Intel Core i7 processors which you allege were sold to Newegg by D&H.

    “This letter places you on notice that these statements are false. You have no basis for publishing these false and malicious statements about D & H. These false allegations are defamatory and disparaging to D&H”s business and business relations and have caused grave and irreparable damage to our client.”

    Emphasis mine.

    That article also mentions that Newegg had already started issuing replacements and they were just trying to figure out where those chips came from:

    Tech community site, Icrontic, picked up the HardOCP story and noted that Newegg had shipped replacements for the fake CPUs quickly to affected customers and that both the e-tailer and Intel were in the process of investigating where the chips came from.

    Emphasis mine.

  18. Re:Glad by noidentity · · Score: 4, Funny

    Maybe as compensation they can send a T-shirt that says "NewEgg sent me a counterfeit Intel processor and all I got was this stupid T-shirt".

  19. Re:Why does NewEgg even need a distributor? by swb · · Score: 4, Interesting

    I get why Intel doesn't want to *retail* them, but what's the point of a wholesaler when you have a retail distributor as huge as Newegg?

    And the same is true of other products sold via other retailers.

    It almost seems like "we/they" put up with a needless set of middlemen who only mark stuff up.

  20. Who is IPEX? by eepok · · Score: 5, Informative

    http://hardforum.com/showpost.php?s=d01ac05d09e4f3d3bfb4364cdbc5d2af&p=1035432866&postcount=927

    From [H] Forums:

    I just want to clear up something Paul keeps bringing up in this thread: Ipex is a division of ASI. Ipex isn't ASI.

    Full disclosure: I worked for ASI for some time back in the 90's (God, I feel old).

    ASI is a legit Intel distributor (one of only a small handful) and is one of Newegg's biggest sources for Intel CPU's. Ipex, on the other hand, is the division that deals in gray market CPU's, RAM, etc.

    1. Re:Who is IPEX? by hey! · · Score: 5, Informative

      No. Gray market does not mean counterfeit. It is just as legal as "normal" channels, although manufacturers don't like it.

      Let's say I manufacture a widget in Indonesia and sell it to US distributors for $100. I sell the same widget to Indian distributors for $10, because you can't sell this widget for as much there. I make the Indian distributor promise he won't sell back to the US and undercut my official channel price. But I can't control what people downstream do with the widget. Indians being smart and enterprising, somebody there figures out he can buy a boatload of widgets from the distributor, ship them back to the US, and sell them at a profit for $40.

      That's gray market. It's the legitimate goods, made on the same assembly line, and passing from hand to hand by completely legal sales. The manufacturers don't like it, and I may cut off my Indian distributor if I think he's involved with this or turning a blind eye. That means the incentive is for gray market sellers to be secretive, and therein lies the potential for a black marketeer to step into the process and represent himself as a gray marketeer.

      When somebody steals widgets from the Indonesian factory, or repackages rejects being thrown out and represents them as good, or sells a non-functional plastic knock-off and represents it as functional, that's *black* market.

      You may end up buying black market goods from somebody who represents himself as a gray marketeer. It could be because he is a fraud, but not necessarily. Goods pass from hand to hand in the gray market, and the fraud may be removed one or two transactions from your purchase.

      --
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  21. Re:Glad by Thaelon · · Score: 5, Insightful

    They vetted the supplier.

    It turns out they did a bad job of it.

    It's their responsibility because the items were sold on their site.

    Now, making good on their fuckup isn't the entitlement mindset, it's excellent, self-serving business sense. Allow me to explain, it's really quite simple:

    You can buy a customer for life far cheaper than you can think by simply owning up to the problem, fixing it, then going beyond that.

    It could be as cheap, and as easy as free overnight/cross shipping of the replacements. You absolutely lose money on the spot. But you're very likely to see the customer again. It's simply thinking long term.

    That kind of service will get noticed and will bring people back next time because they know that even if shit goes wrong, they'll be well taken care of.

    It's the same reasoning why most of my video cards are eVGA. Their customer service to my friends has been so stellar I know I'll be taken care of if their shit breaks. Yes, I wrote that correctly, I've never even had to deal with their customer service, yet they're my first choice for video cards. All because of stellar service they gave two of my friends. For a paltry $300 or so they bought three repeat customers. It's just another form of investment, and I'm living proof that it works. Hell, I just gave them great PR, and I hate PR.

    --

    Question everything

  22. Re:Lost customer by Anonymous Coward · · Score: 5, Insightful

    You'd seriously lose faith in a company that blows everyone else away in customer service because of this one thing? Are you serious? So it doesn't matter that they exchanged the fakes and bent over backwards to fix the problem?

    Grow the hell up and come back to reality. This entitled generation crap is beyond annoying, expecting everyone and everything to be absolutely perfect and cater to your every need and the second they don't then BAM they're horrible and evil.

  23. Re:Rejecting?? by blankinthefill · · Score: 4, Interesting

    I'm not so sure it was all about a PR stunt. The original thread had quite a few response pointing out the defamation laws that could have been used against them if they had moved too quickly to out a supplier. I'm sure the legal team had a few days of hard work making sure they were (reasonably) safe from a suit before they allowed any statement out that named names.

  24. Re:New Egg by jim_v2000 · · Score: 4, Insightful

    When Paypal works for everyone else who uses Newegg, but not you...the problem is probably not with Newegg.

    --
    Don't take life so seriously. No one makes it out alive.
  25. Re:New Egg by Bureaucromancer · · Score: 4, Informative

    Except that NewEgg didn't send any cease and desists. They were sent by the distributor who shipped the units.

  26. Re:New Egg by flatrock · · Score: 5, Informative

    Actually the cease and desists were sent by a different distributer who was incorrectly named as the culprit and was justifiably upset. The cease and desist letters by D&H were appropriate, and their claims that they were being falsely accused were accurate.

    I think Kyle at HardOCP was honestly misinformed, but he didn't exactly handle if well. He accused Newegg of being dishonest and trying to cover things up. He appologizes to D&H but defends himself by saying "We would NEVER "speculate" on something of this nature, as there is NOTHING for us to gain by misinforming our readers." However, he never gave Newegg the same benefit of the doubt he claims he deserves. He adamantly accused Newegg of a cover-up when they originally relayed IPEX's story about demo processors. Newegg had no more to gain by lying than HardOCP did.

    Kyle has been around a long time and should know better. He owes Newegg one hell of a public appology, and hopefully after a little more thought he will man up and make that appology.