“At the end of an alley in Taiwan’s most violent city, a black Mercedes-Benz sedan blocks a sliding- glass door that opens only from within. Inside, technophiles can buy iPhone knockoffs for two-thirds the legitimate price,” John Liu and Chinmei Sung report for Bloomberg.

“With a touch-screen and Apple Inc.’s logo on the back, the ‘iClones’ look just like the real thing,” Liu andSung report. “Apple won’t offer iPhones — which combine a phone, music and video player with wireless Internet — in Asia until 2008. The owner of the shop in Sanchung, near Taipei, says he began selling ‘aifungs’ in December, six months before the iPhone went on sale in the U.S.”

“The clones show how fast Asian counterfeiters move. ‘Ben’ says his company designed the fakes from pictures posted on the Internet before Apple Chief Executive Officer Steve Jobs unveiled the iPhone in January,” Liu andSung report. “Knockoffs cost the global economy $650 billion annually, the U.S. Chamber of Commerce estimates. Apple spokeswoman Jennifer Bowcock wouldn’t discuss how much the company loses as a result of phony products.

“‘The longer Apple delays, the more the pirates can rip the company off,’ says Chialin Lu, an analyst at Yuanta Core Pacific Securities Co. in Taipei,” Liu andSung report.

“Cupertino, California-based Apple, which said yesterday it sold its millionth iPhone, intends to fight back. ‘We are committed to pursuing counterfeiters and others who steal from us and deceive our customers,’ Bowcock says. On its Web site, Apple asks consumers to report fake hardware to ,” Liu andSung report.

Full article here.