In the early morning of October 10, Sina Technologies News reported that Apple has been struggling with the problem of repairing the iPhone for the past five years, according to the US technology media The Information. At the heart of the problem is that crime teams buy or steal iPhones, remove high-value components such as CPUs and displays, and then go to Apple Stores and claim that their phones are broken, requiring clerks to replace parts as required by the warranty period and then sell the parts they stole.
At the height of this phenomenon, Apple found that 60% of requests for iPhone repairs were fraudulent in mainland China and Hong Kong, causing the company to lose billions of dollars a year. Apple took the issue seriously for the first time in 2013, and The Information described in detail the cat-and-mouse game between criminal gangs and the company.
Apple's retail stores have taken a very relaxed approach, replacing defective iPhones as long as they don't appear to have been intentionally damaged. Previous estimates by company executives were that fraud accounts for less than 10% of all repair requests.
But in 2013, an Apple data scientist counted the number of iPhones that had been repaired and replaced with Apple IDs, providing a very good way to estimate the true number of fraudulent replacements. That's because it's natural for law-abiding users to re-login to the Apple ID they've been using since the iPhone was repaired. As a result, the criminals who took the stolen iPhone and repaired it in Apple's physical store became very prominent in the company's system. As a result, the Apple Corp has finally begun to take seriously the problem of iPhone repairing fraud.
The statistics reveal the real truth: in China, more than 60% of iPhone repair requests are fraudulent. The Information reports that Apple spent $1.6 billion on warranty repairs in fiscal year 2013, and ended up spending $3.7 billion, largely due to repair fraud in the Chinese market.
Apple's initial move was to stop allowing users to go directly to the store to fix the iPhone, and instead to make pre-appointments to ensure that the person arriving was the real owner of the pending iPhone. However, the reservation system was broken down by hackers who found holes in the network system that monitored all the time slots.
Apple then began requiring the iPhone to be repaired to run software diagnostics to identify any fake parts in the phone, but did not require Apple store staff to disassemble the parts for inspection. Criminal gangs easily bypass this rule by simply keeping the iPhone off the hook.
Some criminals are more sophisticated. They acquire the records of Apple users who have sold their iPhones and then set their fake iPhones to show the serial numbers of the sold phones, thereby tricking Apple into providing a warranty repair service for an iPhone that is supposed to be out of warranty.
Apple Corp adjusts adaptable, but the tricks of tricksters are endless. In a particular case of violence, a manager of Apple's physical store was threatened with a weapon, when criminals tried to obtain user data through bribery.
Now, Apple has mandated that all replacement iPhones required during the warranty period be sent to a specific repair center for more rigorous testing. Apple has even added security measures to the iPhone's components, such as coating batteries with invisible pigments and coating CPUs with special waterproof seals that can only be seen at specific wavelengths.
The Information reported that Apple's internal secrecy principle was one of the reasons it took so long to resolve the problem. This is because supply chain logistics, manufacturing, and AppleCare departments need time to work together to come up with meaningful solutions.
It took nearly five years, but now it seems that Apple's actions will finally be able to crack down on criminals, reducing the number of iPhone repair frauds. The current estimate is that repair fraud in the Chinese market has fallen from a peak of 60% to about 20%. However, Apple Corp now has similar problems in other markets such as Turkey and the United Arab Emirates. This is a never-ending war for the world's largest company with the largest market value. (Tang Feng)
Waonews is a news media from China, with hundreds of translations, rolling updates China News, hoping to get the likes of foreign netizens