As always, the thing I'm most amused by is the amount of accessories that the Fake ships with: case, a dock, an actual voltage adapter.
Sure the build quality and OS are lacking, but I wish Apple would cease their penny pinching, year after year. You guys remember the size of the box from the original iPod right? Besides the fact that it was honkin' huge, it was because Apple actually put stuff in the box.
Although it's nice to receive a lot of accessories, I think the penny-pinching was a good idea. It reduces the amount of materials they use in their products (not everyone needs a dock AND both USB and FireWire cables for their iPod, for example). And besides, the new iPhone costs $175 or something to make. That's a huge manufacturing cost. Including more stuff would just pass on the cost to us consumers.
As for the fake, you realise that it's not just Apple. Fake Nokias, Sony Ericssons and other such gimmicks circulate the market in China. They're not sold in official China Mobile or China Unicom stores or the abundant Carrefour supermarkets (which sell only legitimate brand name phones) but are sold in the thousands of scattered, dingy, smoky and grimy electronics markets that dot Chinese cities (I've been to many). I'll tell you one thing: these phones are dirt cheap. For many with a lower budget, it's either this, an apparently full-featured, big colour screen phone with a camera, a touch screen, data capability and dual sim capability, or a basic Nokia handset at a similar price. For the most part I found it was lower class cityfolk who used these phones. Most of them weren't fakes, per se, but design clones made by domestic manufacturers. Sure, they weren't great, but they made and received calls, and were cheap. Some people can't afford better. On the other hand, while the gap between rich and poor in China is massive, there are throngs upon throngs of middle class in the developing cities. And believe me, these people will spend a small fortune on new phones every few months.
You get an iPhone every year and a half or so? Some Chinese teenager with spiky hair gets the latest Sony PDA-cameraphone-internet-device-PSP-miniature-laptop thing every half year.
There's plenty of room in China for fakes, and for real merchandise alike. It's an interesting place.