Police in Shanghai, China have discovered a group of five people assembling and selling fake versions of the iPhone. Those arrested are thought to be part of an organised gang that were buying in parts from Guangdong in southern China and assembling them in rented apartments in Shanghai. Some of the parts being used are even thought to be genuine components used in the assembly of the actual iPhone 4. About 200 fake iPhones were found during the raid on the apartments.

The cost to make one fake iPhone, which used some genuine parts, was around 2,000 yuan ($313). It was sold on unauthorised markets and on the Internet for around 4,000 yuan, only a few hundred yuan cheaper than the real iPhone, the newspaper said. The fake iPhones had the same functions as the genuine ones but had a shorter battery life, it quoted the police as saying.

This story is not exactly a great surprise, it wasn't that long ago that actual fake Apple stores were appearing in parts of China. They were found to be selling actual Apple products but were certainly not authorized in any way. China has often been criticized for its lack of control over pirated goods; which can easily be found in shops.

Source: Reuters, China Daily