News Column

Fake Phones - Son and the Big Crack in Computer Village

July 28, 2014

Geoff Iyatse

ABOUT three years ago, smart phone was a luxury only a small segment of the Nigerian community could afford. But today, all you need to own a multi-functional device is the desire to acquire one. The new marketing mix of (especially) of the android technology has removed the toga of exclusivity off smart phone business, making it a commonplace device.

And, with the search for an all-inclusive smart telephone came a much bigger challenge -- cloning and counterfeiting. Telephone counterfeiting did not start with android or ipad. The popularisation of the entire mobile phone technology in the country rode on counterfeiting. Popular brands such as Nokia and Samsung, at some point, raised an eyebrow over the activities of counterfeiters.

But the vogue around smart phone has taken substandard challenge of counterfeiting further. Mike Akinjo, who runs a distribution outfit at the Lagos Computer Village, said the fraudsters have switched to smart phones because of falling demand for conventional mobile phones. He said if the genuine cell phones "find it difficult to compete, those who build their business on cloned telephone must have known that they don't stand any chance in that market."

The old challenge, which has cost popular brands untold hardship, in terms of falling sales and rising loss of confidence, is on the rise. On the high-end, smart telephones go for as much as N150,000 or more. Yet, there are some that come as low as N5,000.

Perhaps, price is the safest factor that differentiates counterfeit or sub-standard from genuine brands. Otherwise, they come with the same features; carry out similar operations and look closely identical. And on the mild side are products that are just filling space, they come with incomprehensible or no label that shows the manufacturer's trademarks. These kinds are the computer village, but unlike counterfeited ones, they pose little challenge since buyers cannot associate them with any popular brands they intend to choose from.

Today, there is a replicate of every fast-selling brand in the market. Nokia, Samsung, Techno and HTC are battling to get their groove back, as counterfeiting threatens to take over the market. Dealers said the popular brands are taken to China where they are neatly copied and mass-produced with inferior materials.

According to Chief Whip of the Computer and Allied Products Dealers Association of Nigeria (CAPDAN), Olabode Oyejobi, counterfeiting is driven by competition and impatience. He observed that 'new comer' dealers travelled to China with about $20,000 with the target of quadrupling the investment in a single trip.

"What happens thereafter, they fake popular brands that are selling for (maybe) N20,000 with N2,000. So, they can conveniently sell a unit for N12,000 and make much more than dealers of the genuine brands would make. When one man sells the same phone 20 per cent lower than the amount a popular distribution sells, you can be sure something is not right somewhere," he observed.

Oyejobi's analogy is everywhere at the Computer Village. Around Slot and other popular vendors, there are a couple of hustling young men who waylay customers with promises that they have stocks they can get for rock-bottom prices. The telephones they trade in, it was learnt, are cloned varieties of brands showcased at popular shops.

Investigations show that counterfeited devices are discounted in the range of 40 to 50 per cent. For instance, a clone of a Samsung Galaxy, which sells for N53, 000 at Slot, is as cheap as N32, 000. The fake dealers position them as London-used phones while they argue that being manufactured for the United Kingdom makes them stronger than new ones sold in Nigeria.

In many cases, there are no signs on the cases of the so-called London-used phones that show that they are used before. But sources said panels of the telephones packaged with brand-new cases are either worn-out or are cheap prototypes of the original version in terms of quality

Interestingly, some fake versions compete with original brands in terms of prices. A staff of a Nigerian representative company of a major brand said the perpetrators have learnt that huge price differential exposes them, saying, "they intentionally close the gap to avoid suspicion."

Recently, the Standards Organisation of Nigeria (SON) ran an advertorial where it warned buyers against certain products promoted by Trinity Communications Technology Services Limited, which allegedly come with conflicting identifies. According to SON, while the telephones were actually H-Mobile and DXD, they were branded Samsung and Nokia. One of them it dismissed as cloned and sub-standard was unbranded.

Special Adviser to the Director General of SON, Angela Okisor, said unsuspecting members of the public were being deceived to buy the fake Samsung brand for N120,000 whereas the actual worth of the phone was N20,000. She described the act as dubious and criminal.

Meanwhile Oyejobi, computer dealer, agreed that London-used phones are sold in Lagos. But he said the majority of the devises so described are counterfeit made by unscrupulous Chinese companies working for some businessmen who have no regards for ethics.

Now, there is a renewed zeal to bring sanity to the technology market with much talk on how to deal with syndicates behind the counterfeited products. To show it was not all about threat, SON raided Trinity Communications after which it seized products worth over N200 million. It subsequently issued a seven-day ultimatum to dealers and importers to 'clean' their shops or face the law.

Head, Inspectorate and Compliance Department of SON, Mr. Bede Obayi, said the action became necessary to review its relationship with market associations in the light of growing the unfair business practices.

But market associations, which Obayi claimed connived with those who perpetrate the criminal act, said they are equally bothered by the trend. With SON's checkpoints at all ports where the devices are brought into the country, an executive member of CAPDAN, John Oboro, asked: "Who is not doing his work?"

Oboro, in an interview on the issue, said the recent raid by SON amounted to witch-hunting. He wondered why SON would visit only one warehouse when hundreds of shops at the Computer Village sold substandard, cloned or fake telephones.

He challenged SON to explain how substandard products get into the country when its officials are supposed to man all ports of entry. He also questioned the essence of SONCAP in the face of rising worry over the standard of products imported into the country. He said the situation was most worrisome because the country has no proper waste management system.

"In no distance time, the electronic gadgets turn to toxic. What do we do with them when that happens? Has anybody ever asked how the e-waste is disposed? And do we consider the impact they have on the environment that is already battling with the challenge of global warming?" he asked.'

While Oboro admitted that closer working relationship with SON and other law enforcement agencies is vital to overcoming the scourge of standard regulation, he noted that CAPDAN would not usurp the mandate a statutory body. He observed that the problem festered over the years because SON has not carried out its responsibility.

But Okisor said SON is doing its best to enhance standards in order to protect brands and consumers. She disclosed the organisation could not have stopped fake or sub-standard goods at ports where the government was ejected some years ago.

It would be recalled that some agencies, including SON (on complaints bordering on undue bureaucracy at the ports), were dislodged from ports some years ago by Coordinating Minister of the Economy/Minister of Finance, Dr. Ngozi Okonjo-Iweala.

Okisor said the decision crippled the organisation's ability to stop fake products from gaining entrance, forcing it to rely on on-site inspection.

Yet, there is another question to the excuse by Okisor. Did SON's presence at ports in the past years stop sub-standard products from entering the country? Still, Okisor said the organisation was ready to launch massive campaign that would clean the market in coming months.

And it is not only telephone units that are the issue, maintenance parts are also affected. Towards the end of last week, Okisor disclosed, SON received a petition from mobile telephone technicians, complaining that there were no genuine replacement components in Nigerian ports. She said the organisation would also send a strong signal to operators of the segment.


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Source: AllAfrica


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