Counterfeiters are hungry for share of Apple’s $ 16 billion AirPods market

US Customs and Border Protection reports that so far in fiscal 2021, it has seized approximately 360,000 wireless headsets, worth an estimated $ 62.2 million. That’s just nine months of foreclosures, but it’s already more than the 290,000 sets worth $ 61.7 million that were seized in fiscal 2020.

In such a large seizure, CBP seized approximately 6,400 counterfeit AirPods and AirPods Pro in Cincinnati, Ohio on July 11. If the seized goods had been genuine, their combined MSRP from Apple would have been around $ 1.3 million, but the five seized shipments were only $ 312 each. All five shipments were heading to a single address in Brownsville, Texas.

Again, federal authorities may not always get it right. In September 2020, CBP in New York seized a shipment of 2,000 units of perfectly legitimate OnePlus headphones destined for Nevada, claiming they were “counterfeit AirPods.” Pressed about the error, CBP doubled down, saying a company “does not have to put an ‘Apple’ wordmark or design on its products” to violate trademark law and adding that importers “have many opportunities … their product does not infringe the relevant trademarks.”

Of course, not all counterfeiters target Apple – well-known brands like Sony, Jabra, Samsung, and Bose have their own counterfeit artists. But despite its position as a premium brand, Apple holds the lion’s share of the wireless headphone market. In 2020, Apple had a 25% market share of “intelligent personal audio”, nearly triple that of Samsung, its closest competitor. That market share stood at nearly 109 million units and, according to market analysis firm Canalys, $ 16 billion or more in revenue.

About 80% of the world’s counterfeit consumer goods come from China, according to Craig Crosby of the Counterfeit Report. At the end of 2016, Apple bought 100 supposedly Apple-made products from Amazon and found that 90% of them were fakes, despite coming directly from Amazon, not third-party listings. During the ensuing lawsuit, Amazon informed Apple that the counterfeit products were supplied by Mobile Star, despite extensive use of the Apple brand.

While some of the counterfeit products are obvious scams, some require physical disassembly and in-depth product knowledge to be identified. Reuse of stolen factory molds is common, and some counterfeit AirPods properly mimic the pairing process with iPhones and even display the correct Apple serial numbers.

Unfortunately, “similar appearance” does not imply “similar quality” – it’s much more difficult to spot inferior audio drivers and amplifier circuits than a slightly discolored or warped chassis. Consumers should also be concerned about safety; Amazon product reviews of counterfeit chargers often include stories of dummy parts overheating, smoldering, or even burning outright during normal use.