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At that time, Apple was selling the iPhone 4, 4, 5 and 5c, easy to disassemble according to current standards. "In the old school world, it would be a car shop where you would take out all the parts and sell them," said iFixit CEO, Kyle Wiens. L & # 39; information. "Now they do it with iPhones."
Apple opened its first retail store in China in Shenzhen in 2009. The country started to become one of its largest markets in 2012-13 and, in 2015, sales accounted for a quarter of its figure of world business. As a result, fraud has started to become a serious problem. The Shenzhen store would have had three times the return of Apple's 5th flagship avenue to the New York Store.
In the old school world, it would be a car cutting shop, where you would take all the parts and sell them. Now they do it with iPhones.
The problem was exacerbated by the ease of access to cheap nested parts in Shenzhen, as well as by the presence of criminal triad organizations in the region. China is also the world's largest market for used iPhones. Most of the devices sold were "Frankenphones" with a mixture of authentic and fake parts and modified versions of iOS.
In the beginning, Apple traded damaged iPhones as long as there was no visible sign of damage. After the warranty claim exceeded double the estimates, Apple attempted to tighten its warranty policy. "Apple has earmarked $ 1.6 billion at the beginning of its fiscal year for global warranty claims, but has finally spent $ 3.7 billion on these claims over the period, according to the company's annual report for this year. exercise", L & # 39; information I said.
At that time, the fraudsters became disruptive, which resulted in the closure of the Shenzhen store at some point. In 2013, Tim Cook was in fact forced to apologize to Chinese consumers for warranty repair issues in China. It was not known at the time, however, that the problem was partly due to fraud.
To combat this problem, Apple created a reservation system that required customers to prove their property before filing a claim, but this system would have been hacked. He has also developed a diagnostic software to detect counterfeit coins, but again, thieves have found a workaround by disabling the iPhones so that they can not be activated.
Finally, Apple stopped making warranty replacements in stores, forcing customers to wait for devices to be verified in distribution and repair centers. When the Shanghai site became saturated, Apple opened new centers in California and Singapore.
Checks revealed fraudulent returns in the hundreds of thousands, but by 2016, Apple had significantly reduced the number of fraudulent claims. It has also reduced the theft of components by using special matrices and sealants for chips and batteries. As a result of all work, warranty expenses decreased for the first time in 2017, from $ 4.66 billion in 2016 to $ 4.32 billion last year.
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