Theres an pretty common idea that genuine products are good and counterfeit products are bad. By and large, this proves true due to obvious design errors or poor quality materials used in counterfeit goods. I think where things get confusing is when you counterfeit goods become very well made with high quality materials.
Case in point, I bought a counterfeit Louis Vuitton wallet in DongmenShopping Center in Shenzhen, China. It cost 100 RMB ($15), 5% the cost of the genuine wallet ($300). It had the same pattern you see below and was made with a slightly less high quality leather than the Louis Vuitton version. I liked the design and needed a new wallet.
A few weeks later I had dinner with a friend, who is a successful Chinese businessman. When I pulled my wallet out to pay, he pulled his out, and in the Chinese fashion, pushed mine away. He then noticed that we had the same wallet. He held his up to mine to compare.
Exactly the same! he exclaimed proudly.
Im pretty sure that Mr Lius wallet was not a $15 knockoff, but instead cost him $400-$500 at one of Shenzhens many LV stores. I didnt mention it less for fear of showing him that im déclassé but because I didnt want him to feel bad that he paid so much more for the same wallet.
The fake Apple story that is popular right now will really challenge the idea of genuine versus counterfeit especially if it is found that the devices are identical. Identical except instead of being manufactured at the Foxconn plant in Longgong, they were produced down the street using the same parts or possibly similar parts using the same templates, machines and components. To be sure, the retail price of an iPhone or iPad is not indicative of the manufacturing cost. And the same for my Louis Vuitton wallet. I really doubt that Mr Lius LV wallet is comprised of anywhere near $300-400 worth of materials and craftsmanship. What do I think it costs to produce? $20. What do I think an iPhone costs Apple to produce (minus advertising, etc)? About $75.
Lets assume that counterfeiters will have to use higher quality materials and pay closer attention to design nuances, and sooner or later the fake looks and works identically to the genuine article. If a fake is so good that an expert cannot tell that its fake, is it fake? You might say that the Louis Vuitton wallet is produced somewhere in France, so the real one must be produced in France. McDonalds hamburgers, ideally, should be produced in America but are often produced (and cooked and sold) elsewhere, and they taste the same anywhere you go.