Pirates are taking a big bite out of the sale of Apple computers in the Far East.
Back-alley manufacturers, most of them located in Taiwan, are flooding the region with counterfeit Apple II computers, and this has slashed sales for the real thing in the Far East. Salesmen estimate that as many as 15 fake Apples are sold here for every real one.
"It's a new phenomenom. They killed the market in the Far East," said Albert Eisenstat, general counsel for Apple at its home office of Cupertino, Calif.
Jeremy Lack, whose Hong Kong firm, Delta Communications Services Ltd., is Apple's major distributer in Southeast Asia, China and Taiwan, estimated that counterfeiters in Taiwan produce at least 1,000 fake Apples a month for export to the rest of the region. About half of them were shipped here with the other 500 sent to other Asian marketing centers, especially Singapore and the Philippines.
Thus computers have joined the large list of pirated products on sale here next to the real thing. Taiwan, with very loose copyright laws, is known as the center of counterfeiting everything from designer jeans to best-selling books, and Hong Kong is one of the major sales outlets for fake products.
Hong Kong, the largest garment exporter in the world, also supports a thriving business making counterfeit designer clothes whose only resemblence to the real thing is the label. Garments bearing such high-priced tags as Gloria Vanderbilt or Calvin Klein are sold in tiny wood stalls in downtown Hong Kong alleys at prices that are a fraction of what the genuine article costs. Lacoste shirts, the trademark alligator on its breast, sell for $35 in legitimate stores, while copies can be purchased for as little as $3 on the street.
Now the counterfeiters have moved into high tech. "This is piracy on a very sophisticated basis," said William M. Kraitzer, Delta's public relations director.
Eisenstat agreed that Lack's estimates on the effect of piracy on the sales of Apple IIs in the Far East are probably correct. But there has been little, if any, effect on the world market for Apple's best-selling computer, he said.
"The only impact has been in the Far East. The impact of piracy on our direct U.S. or European sales has not been great," the Apple official said.
Nonetheless, there are signs that fake Apples are slipping into the United States through West Coast ports. The U.S. Customs Service announced that it has seized fake Apples in Honolulu and California. The computers were identical in size and appearance to genuine Apple computers, although some carry brand names such as Orange, Apollo II, Golden, Pet TK 1000 or AP II.
Fighting back, Apple has filed a lawsuit in U.S. District Court in Los Angeles against a firm called Formula International Inc., which it accused of importing fake Apple components from the Far East.
In Hong Kong, meanwhile, Lack said that the influx of fakes has made it almost impossible to sell genuine Apple II computers. Some of the fakes are marketed as the real thing, using the familiar trade mark of an apple with a bite out of it, but sold at a cut-rate price that cannot be matched by any dealer handling California-made Apples. Other counterfeits, which sell for even less, are marketed under brand names that only slightly resemble Apple--such as Apollo or Golden, which Lack said is the biggest seller of the Apple clones.
"If the logo was not different, you would think it was an Apple. It uses the same design, the same color plastic. The case is slightly darker and the keyboard is black instead of brown," said William M. Kraitzer, public relations director for Delta.
The Golden II sells for $350 to $400 in Hong Kong, where some stores slap a fake Apple logo on a Golden II and sell it for $500 or more--about one-fourth of what it would cost if it were the real thing.
"The price is how much you are prepared to pay for the computer," said Kraitzer. "The copies work almost as well, up to a point. But if something goes wrong, there's no backup, no product support. If you take it back to where you bought it, the guy is either out of business or selling jeans."
"When you've got something like this, you can't just build them like fish and chips," he added, pointing to a real Apple II on his desk.
Taiwanese counterfeiters, who reportedly have set up their own trade association, now are trying to get around that shortcoming by offering warranties of their own.
Apple is fighting back in the courts of Taiwan and Hong Kong and is mounting a more aggressive sales program. Apple lawyer Daniel Wendin said the company has filed two suits against major pirates in Taiwan amd more than half a dozen legal actions against Honk Kong firms accused of marketing counterfeit computers.
The problem in fighting pirates is that Apple computers are all built with components readily available and, according to Wendin, require very little engineering skill to assemble.
Apple is replacing Delta as of Nov. 30 as its major Asian sales distributer and is setting up its own marketing network. Delta's Lack said his firm lost the distributorship for complaining too loudly that Apple wasn't fighting the piracy hard and fast enough.
"We've been kicking them in the teeth pretty heavily over this piracy business," said Lack. "We've been trying to get them to act for a long time. I don't think now they will ever be able to stamp it out. They may be able to control it, but I doubt it."