NewEgg Confirms Shipping Fake Core i7s 314
adeelarshad82 writes "After originally rejecting the story, online retailer NewEgg confirmed that a shipment of Core i7s were indeed fake, and apologized for the affair. NewEgg has also broken off its relationship with IPEX, the supplier of the phony lot. The retailer said that it has already contacted affected customers and would continue to reach out and replace the counterfeit parts. We discussed the fake Core i7s over the weekend."
Intel Inside... (Score:2, Informative)
I sure liked the typos on the box. All that effort to duplicate holograms and what not, and they blow it on spacing and spelling.
Criminals, you gotta love their chutzpah.
Rejecting?? (Score:3, Informative)
When did they reject the story??
They never denied shipping fake units... the only difference between their story then and now is WHY the fake units existed.
Re:Glad Newegg confirmed they're fake! (Score:2, Informative)
They were leaning on that "oh, our bad, we got some 'demo units' by mistake" excuse pretty hard.
Demos? C'mon, demos are supposed to work, not be a blob of aluminum.
NewEgg handled it well, (Score:5, Informative)
They never denied there being a problem although they took a day to figure out what was happening.
They have already apologized, announced they are sending out replacements and announced they are getting a new distributor a couple of days ago.
D&H Distributing (Score:5, Informative)
Counterfeit Intel CPU Saga Comes to a Close [hardocp.com]
At no time did HardOCP speculate as to what company was supplying the counterfeit processors to Newegg. Our source that informed us of the supplier being D&H Distributing came from within Newegg's organization. We belived the information to be accurate and reported it to our readers. Newegg is stating that IPEX shipped it the counterfeit processors. I am not sure as to why we would get conflicting information, and we will further investigate that.
At this time we offer our apologies to D&H Distributing for naming it as the supplying distributor. HardOCP was simply reporting the information that we believed to be accurate. We would NEVER "speculate" on something of this nature, as there is NOTHING for us to gain by misinforming our readers. We will be investigating further as to why we were misinformed on this detail.
Re:Lost customer (Score:5, Informative)
They acknowledged that they had shipped non functional units on Friday:
http://twitter.com/Newegg/status/10050889498 [twitter.com]
They probably would have done better to say less, but they never denied the issue entirely.
Re:fake fakes? (Score:4, Informative)
Not true. We aren't talking "fake - not the correct part", we're talking "fake - not a cpu but a hunk of metal, not a cooler just a piece of plastic with a sticker on it".
If you are buying cpus, you'll know they're fake when you see them.
Re:BS (Score:1, Informative)
Newegg themselves never denied the incident nor did they threaten to sue anyone.
Re:BS (Score:5, Informative)
According to that article Newegg did not threaten to sue, Newegg's supplier did.
Re:BS (Score:2, Informative)
Re:What about the legal threats? (Score:5, Informative)
Re:Glad (Score:3, Informative)
Re:BS (Score:5, Informative)
Read the article you linked. It's the distributor D&H that these sites accused without evidence and as such it was the D&H lawyers that sent the cease and desist. As it turns out it was a completely different distributor (IPEX).
"A company called D&H Distributing doesn’t consider it legitimate for the free press took umbrage to this. In fact, the legal beagles over at D&H Distributing got so worked up over the horrifying gall and chutzpah of Icrontic and HardOCP for daring to ask a question that the company slapped both publications with a “cease and desist” order.
Sent by the lawyers representing D&H, Creim Macias Koenig & Frey, it reads in part..."
Re:BS (Score:4, Informative)
Your link says that D&H, not Newegg threatened legal action.
Considering that D&H did not sell the fakes to Newegg, well, they are justifiably upset that people are wrongfully blaming them.
IANAL, so I don't know if they have an actionable complaint, but your link doesn't show a Newegg legal threat, and, again, D&H is understandably pissed off that they were blamed when they had nothing to do with it.
Re:After following this.... (Score:5, Informative)
If IPEX was tossed out, I'm guessing it was someone at IPEX who was swapping processors out for dummies (for sale elsewhere, I assume) and then sending the fakes to Newegg.
Re:BS (Score:5, Informative)
Did you even read that article you linked to? It says that the legal threats came from a company called D&H Distributing that the sites claim sold the counterfeit equipment to Newegg:
In fact, the legal beagles over at D&H Distributing got so worked up over the horrifying gall and chutzpah of Icrontic and HardOCP for daring to ask a question that the company slapped both publications with a “cease and desist” order.
Sent by the lawyers representing D&H, Creim Macias Koenig & Frey, it reads in part:
“It has recently been brought to our attention that you are responsible for publishing on the internet, and specifically on your websites, untrue statements respecting allegedly counterfeit Intel Core i7 processors which you allege were sold to Newegg by D&H.
“This letter places you on notice that these statements are false. You have no basis for publishing these false and malicious statements about D & H. These false allegations are defamatory and disparaging to D&H”s business and business relations and have caused grave and irreparable damage to our client.”
Emphasis mine.
That article also mentions that Newegg had already started issuing replacements and they were just trying to figure out where those chips came from:
Tech community site, Icrontic, picked up the HardOCP story and noted that Newegg had shipped replacements for the fake CPUs quickly to affected customers and that both the e-tailer and Intel were in the process of investigating where the chips came from.
Emphasis mine.
Re:Ipex website returning blank pages (Score:3, Informative)
http://web.archive.org/web/20071020045918/http://www.ipexinfo.com/ [archive.org]
Oct 20, 2007 wayback cache
Re:New Egg (Score:3, Informative)
Who is IPEX? (Score:5, Informative)
http://hardforum.com/showpost.php?s=d01ac05d09e4f3d3bfb4364cdbc5d2af&p=1035432866&postcount=927 [hardforum.com]
From [H] Forums:
I just want to clear up something Paul keeps bringing up in this thread: Ipex is a division of ASI. Ipex isn't ASI.
Full disclosure: I worked for ASI for some time back in the 90's (God, I feel old).
ASI is a legit Intel distributor (one of only a small handful) and is one of Newegg's biggest sources for Intel CPU's. Ipex, on the other hand, is the division that deals in gray market CPU's, RAM, etc.
Re:Glad Newegg confirmed they're fake! (Score:2, Informative)
These weren't demo units, they are nothing like demo/sub-standard products. Search them out on the youtube posts on it. Basically they're just squares of aluminum (no pins) and a plastic mold for the fan with a sticker on it for the blades. Most people are assuming they're duff but real CPUs, they're not, they do not function, cannot function, and do not look like the real parts.
Re:Rejecting?? (Score:1, Informative)
Yes they did. Against all common sense, NewEgg had been insisting the CPUs were "demo" units until today and hardware enthusiast sites like HardOCP were calling them out. Intel came out yesterday and basically said, if the web photos are legit as represented, then the CPUs are most certainly fakes. I suspect NewEgg was waiting until they could confidently pin the blame on a 3rd-party distributor before letting the truth out.
Shameful PR stunt if you ask me.
Re:D&H Distributing (Score:4, Informative)
Re:Who is IPEX? (Score:5, Informative)
No. Gray market does not mean counterfeit. It is just as legal as "normal" channels, although manufacturers don't like it.
Let's say I manufacture a widget in Indonesia and sell it to US distributors for $100. I sell the same widget to Indian distributors for $10, because you can't sell this widget for as much there. I make the Indian distributor promise he won't sell back to the US and undercut my official channel price. But I can't control what people downstream do with the widget. Indians being smart and enterprising, somebody there figures out he can buy a boatload of widgets from the distributor, ship them back to the US, and sell them at a profit for $40.
That's gray market. It's the legitimate goods, made on the same assembly line, and passing from hand to hand by completely legal sales. The manufacturers don't like it, and I may cut off my Indian distributor if I think he's involved with this or turning a blind eye. That means the incentive is for gray market sellers to be secretive, and therein lies the potential for a black marketeer to step into the process and represent himself as a gray marketeer.
When somebody steals widgets from the Indonesian factory, or repackages rejects being thrown out and represents them as good, or sells a non-functional plastic knock-off and represents it as functional, that's *black* market.
You may end up buying black market goods from somebody who represents himself as a gray marketeer. It could be because he is a fraud, but not necessarily. Goods pass from hand to hand in the gray market, and the fraud may be removed one or two transactions from your purchase.
Re:This is sarcasm....somewhat.... (Score:3, Informative)
That's bloody insightful in my book. Not even with sarcasm, personally if idjit joe can figure out how to make it work and work well. And there's a low failure rate it means that it's safe to use with half of my family.
Re:New Egg (Score:4, Informative)
Re:NewEgg handled it well, (Score:5, Informative)
> It was only after they were called out on that they owned owned up to
> shipping counterfeit units. Who knows the rational for that, maybe it was
> just ignorance or whatever.
When they said that the junk was demos shipped by accident they were repeating what their supplier told them. Would have been better to have just said "We acknowledge that they are real will replace them, but we are still investigating" until they heard from Intel. Still, they handled it fairly well. The important point is that they did not at any point try to deny that there was anything wrong.
IPEX Denies Being Original Source (Score:4, Informative)
http://www.crn.com/hardware/223300173;jsessionid=B1V040G2ULN1LQE1GHPSKH4ATMY32JVN [crn.com]
"Ipex has been supplying computer components to the technology industry for over 10 years with the goal of providing quality products and services to our customers. Recently we were referenced in connection with some counterfeit Intel Core i7 920 Microprocessors sold within the US market. While we purchased these products in good faith from a supplier we are very disappointed to learn of the questionable status of these products and are taking appropriate action to resolve the issue for any impacted Ipex client as well as are fully cooperating with Intel's investigation in to determining the original source."
Re:Rejecting?? (Score:2, Informative)
It's still a bit odd how neither NewEgg nor Intel wouldn't outright deny they were fake. This whole fiasco sounds quite a lot like the recent Micro SD issue that Chumby ran into [bunniestudios.com] a few weeks earlier. An interesting read about the "grey" market and "ghost shifting".
Re:New Egg (Score:5, Informative)
Actually the cease and desists were sent by a different distributer who was incorrectly named as the culprit and was justifiably upset. The cease and desist letters by D&H were appropriate, and their claims that they were being falsely accused were accurate.
I think Kyle at HardOCP was honestly misinformed, but he didn't exactly handle if well. He accused Newegg of being dishonest and trying to cover things up. He appologizes to D&H but defends himself by saying "We would NEVER "speculate" on something of this nature, as there is NOTHING for us to gain by misinforming our readers." However, he never gave Newegg the same benefit of the doubt he claims he deserves. He adamantly accused Newegg of a cover-up when they originally relayed IPEX's story about demo processors. Newegg had no more to gain by lying than HardOCP did.
Kyle has been around a long time and should know better. He owes Newegg one hell of a public appology, and hopefully after a little more thought he will man up and make that appology.
Re:Glad (Score:3, Informative)
Random anecdotal example: A friend of mine bought a PAX 08-branded Razer Deathadder gaming mouse at (surprise) PAX 08. Turns out these mice had a defect: the scroll wheel doesn't glow! Mind you, I didn't even know it was supposed to (maybe my friend did, not sure) but in any case, Razer immediately apologized for the "defective" batch of mice (that were produced one time, in limited quantity, specifically for one event) and shipped everybody a replacement without the cosmetic defect. Two high-quality, fully functional mice, for the price of one, on a special one-off production run no less.
Why yes, I do recommend buying gaming peripherals from them. Who would have guessed?
Re:Why does NewEgg even need a distributor? (Score:3, Informative)
Distributors, wholesalers or middle men if you prefer provide both inventory and financing for retailers, even large ones. The goal in a business like Newegg is to receive funds from customers before you have to pay your suppliers. In other words you don't want your capital tied up in inventory if you can help it. Of course not having inventory can mean lost sales so there is a balancing act required.
Its all about terms and conditions.
1,000 per week is only 52,000 per year. (Score:3, Informative)
Re:D&H Distributing (Score:1, Informative)
If you have a news item about something that happened at company, and low level person there gives you some information, are you just going to ignore it? Please.
The choices are 1) don't report the information but keep digging until you can come up with a second independent source with with the same information or 2) report the information-- and risk getting burned if your single source turns out to be bad.
Now, if your "number one goal [of your website] is to provide [your] readers with accurate reporting" [hardocp.com], the choice should be clear.
For your amusement here's a story about single source reporting and blogger credibility. [techdirt.com]
there's more to grey market than reimports (Score:4, Informative)
You are speaking of reimports. They're just one aspect of the grey market.
There are other grey market goods. For example, Intel might give out a sample of an i920 to a distributor or retailer for free as a gift. They say not to resell it, but you know, maybe they just do anyway. This becomes a grey market good too.
Basically, any a good is resold against some agreement (borders as you say, NFR in my case) it becomes a grey market good. As you mention, it's typically still a perfectly good item, it's not counterfeit or anything.
I don't really agree on your definition of black market. Black market goods are typically anything that is illegal to sell, they can still be legit goods, just you're not supposed to be able to buy/sell them. If I buy illegally imported liquor that the government didn't get their taxes on, it's black market liquor, even though it's still legit. It also can be a legit good that was stolen and resold. And it's still a legit good, but you might not get a warranty (you might not on grey market goods either!). These two examples are the most typical things people think of when you hear black market.