Saturday, July 30, 2011

A New Threat to Apple's Empire?

I wrote yesterday about what could be the single biggest threat to Apple's charge to top Exxon Mobile as the U.S. company with the biggest market cap., but here's a new threat: iFraud.

China has long been the bastion of intellectual piracy. They've stolen and produced countless illegal copies of movies, music and software for decades now, but this is taking it to a whole new level. I am referring to reports of entire Apple stores being faked in China.

It's one thing to pirate copies of software or even electronics, since it's hard to find the people responsible. But allowing an entire illegitimate store to exist in a major city is a blatant disregard for copyright laws in the least!

Worse still, there are multiple stores within mere city blocks of each other!

I have no idea if Steve Jobs and company have any real recourse since the Chinese government itself is uninterested in enforcing intellectual property laws, but investors in Apple would be justified in asking Mr. Jobs what he plans on doing about this threat to revenue. Just because there are no legal avenues doesn't mean no action can be taken. Steve Jobs is renowned for his lateral thinking when solving problems, and he surrounds himself with some of the brightest people around.

It will be interesting watching this situation unfold, especially if shareholders put pressure on the company. Especially since Apple said last week that China was "very key" to its record earnings and revenue in the quarter that ended in June.


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