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Apple as Status Symbol: Pretending to Have an iPhone in China

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Chinese vendors are selling fake iPhone signatures for a popular instant messaging service.

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MINYANVILLE ORIGINAL Owning an iPhone is a wildly popular status symbol for urban youth in China. Since Apple (NASDAQ:AAPL) began selling its products through third parties in China -- and even more so since the country's first Apple Store opened in Beijing in June 2008 -- the company's popularity has skyrocketed amongst middle-class and upper-class Chinese able to afford its products. Of course, those unable to afford Apple products want a piece of the action as well, so fakes and counterfeits have followed.

In 2011, an American blogger named Jessica Angelson reported on her blog BirdAbroad (now known as This Woman's Work) that she found three fake Apple stores in Kunming City (read more here). In fact, Apple's main presence in China is via authorized specialty retailers that look, work, and sell Apple products just like official Apple Stores. Numbers aren't known, but some experts estimate the number of these third-party retailers, with names like "iSpace," at over 2,000 (read more, from Knowledge@Wharton). The fake Apple stores and the authorized third-party retailers probably look pretty similar.

And now, with the rising popularity of that quintessential status symbol, the iPhone, a new and profitable business has emerged: the selling of fake iPhone signatures for users of the massively popular instant messaging program Tencent QQ (HKG:0700).

According to a news report from China National Radio on Wednesday, vendors on the Chinese e-commerce site Taobao, the eBay (NASDAQ:EBAY) of China, owned by Alibaba Group, have been selling the fake signatures for five yuan ($0.80) per month to non-iPhone QQ users. With the purchase, every time a non-iPhone user logs into the QQ service, which has 780 million users in China, their status reads "____ has logged in Via iPhone." Instantly the user may assume the prestige of owning an iPhone, for a very small fraction of the cost. It's a new, online evolution of owning a fake Prada bag or Rolex watch, except it's harder to determine what's fake and what's real. So continues democratization through the anonymity and endless variability of the Internet.

This so-called "consumer vanity business" is so good that some top vendors of the signatures have allegedly sold more than 3,000 signatures online and Taobao has at least 218 different vendors of the fake signatures. The online vendors have been selling for almost a year now, with first reports of this fake signature surfacing in the American media last February.

In China, an iPhone is a luxury. According to the 2011 McKinsey Insights China report "Understanding China's Growing Love for Luxury," the market for luxury goods in China is projected to hit $27 billion in the year 2015, which will account for 20% of the global luxury market. And given the functionality of the iPhone, the device transcends mere luxury. It is a symbol of wealth, but also of ability and of a kind of western independence that is taking hold, along with capitalism, in the People's Republic of China. Given how expensive the device is (the 16GB iPhone 5 sells for 5288 yuan or $842), the fake iPhone signatures allow China's working class to share, however minutely, in the prestige of China's new, American status symbol.

Read more from Minyanville:

Are Google and Apple Preparing for the Death of Smart Phones?

Would You Give Your Kids a Justin Bieber Debit Card?

China Watch: China Mobile Hurting Without iPhone Deal


No positions in stocks mentioned.
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