Photo: All Rights, … Mysterious Persons in China

No term in the English language better describes today’s story than,  “I told you so!” In the past, I’ve written about the problem with fake goods from China, spying from China and the world’s biggest market for counterfeit goods, EBAY! Each of these issues is a story, a very long story, in itself. Today we’re going to pull all of these issues together into one jumbo tale of exceptionally bad judgment.

Having the best smart phone is a matter of status, for all of us. It might be the highest res screen, or the fastest processor, or a new 3D technology… but we all crave new “bling” on our phones. Plus, most smart phone plans have a loan built into the plan that only requires an up-front payment of between $0 and $200, instead of the $600 or more cost of the phone. When you make your last loan payment, you’re usually told, “You’re eligible for a free new phone!” That process has created a culture where we upgrade our phone every two years, making even slightly old phones look outdated.

Why are our tiny phones so expensive, when entry level laptops can cost as little as $300? Well, for the most part, our phones are computers. They have similar amounts of memory, not quite as good storage and processor speed, higher resolutions monitors and better battery time. Not identical,  but smart phones are equivalent to laptops, if you think of them as specialty laptops… or tablets. And, it has always cost a lot more when you want to package the same features in a smaller space. There are definitely consumers who want to upgrade their phones much more quickly than they would upgrade their home computers.

Given our appetite for new phones, we shouldn’t be surprised to see counterfeit phones. Earlier this year we saw a credible looking Samsung Galaxy knockoff, the Goophone i5S. Clearly designed to look and act like the Galaxy phone of a similar name, but at half the price. Now we have the Star N9500, yet another Galaxy knockoff (this time the S4). You can buy this Chinese manufactured fake on EBay. For those of you who don’t know about Ebay, aside from being the world’s largest auction house, it may also be the world’s largest seller of counterfeit goods (although that dubious title may soon be taken by Alibaba, China’s big trading site).

Ebay has been repeatedly sued and  petitioned by well-known brands, such as Tiffany’s, to stop the sales of counterfeits. However, because Ebay is an auction house, and not a department store, the law does not provide the same protection against counterfeiting. You can sue thousands of individual sellers, but not eBay itself, which is technically not selling… just facilitating a sale between two other parties. In an environment where buyers actively seek “knockoffs”, fully knowing that they are not the real product, it becomes even more difficult for major brands to protect their brands and reputations.  Which brings us back to the Star N9500. Most buyers know that it is not a Galaxy, and that it a different phone with different specs. But, what no one knew was that the phone has malware built into the operating system!

Yep! This phone was designed as a spying device. It doesn’t just have spyware, IT IS SPYWARE! The software that allows it to remotely control your camera and capture all of your activity, and then hide this so deeply that you cannot find it, is built into the core of the phone’s hardware and cannot be removed!  How’s that for a bargain phone? It’s like someone put together every urban legend about the Internet into one story. Chinese espionage, the dangers of buying on-line, corporations ripping off the average citizen, my phone is spying on me!

It looks like your Grandma was right. You get what you pay for. Big brands have been screaming about counterfeits for years, but the average buyer thinks, “What’s the harm? Besides I know it’s fake!” You may know that it’s not a real Galaxy, but do you know that it is a “real” spyware device? It’s hard to resist that once in a lifetime deal, and the bad guys know that. But for a deal like this, once in a lifetime is once too much… and that’s my Niccolls worth for today!