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The hacking of wireless communications devices, branded by an Asian company and used by Hezbollah operatives, has sparked an intense search for the devices’ origins, revealing a shadowy market for devices with outdated technology where buyers may have little guarantees about what they buy.
While supply chains and distribution channels for new, more advanced products are tightly managed, that’s not the case for older electronics from Asia, where counterfeiting, excess inventories and the complex nature of contract manufacturing deals sometimes make it impossible to pinpoint the source of a product, analysts and consultants said.
The reactions of companies linked to the explosive devices that killed 37 people and wounded about 3,000 others in Lebanon last week highlighted the difficulty of determining how and when they were converted into weapons.
Taiwan-based Gold Apollo blamed a company in Europe that licensed its brand, prompting investigations into the origins of the devices in Hungary, Bulgaria, Norway and Romania.
Japanese company Icom initially said it could not determine whether the walkie-talkies bearing its name were genuine because the market was full of counterfeits, but issued a statement yesterday saying it was highly likely that the walkie-talkies that exploded in Lebanon were not its products.
The ICOM website quoted Lebanese Telecommunications Minister Johnny Corm as saying that the devices were not imported through a distributor and that counterfeit products with the same model number are imported from other countries.
The Japanese company said that examining the devices that exploded would be necessary to ensure that they were not produced by it, but “in light of the various information that has been revealed, the chances are very low that these devices are our products.”
“If the supply chain was compromised to put explosives inside the devices, that’s an amazing plan,” said David Fincher, a China-based technology expert and consultant. “But it’s not that hard to compromise the current supply chain, and it’s probably the easiest thing to do.”
He added that counterfeit products are widespread, especially in major manufacturing centers such as China, where counterfeit components can be easily produced, adding that the transition from counterfeit components to supply chain penetration is easy.
“As a technology specialist, I can say that placing small quantities of explosives in wireless communication devices is not difficult,” he continued.
A security source said that Hezbollah obtained the devices about five months ago, and that it was believed that it had purchased them from Gold Apollo.
Photos of the device after it exploded showed that the laptops had stickers bearing the name of Icom and the words “Made in Japan.”
The two companies ruled out the possibility that any of the deadly components were manufactured in either of their factories on the territory of the two countries.
Taiwan’s Economy Minister Kyu Jie-hui said the components of the devices that exploded in Lebanon were not made in Taiwan.
According to a letter from the Lebanese mission to the United Nations to the UN Security Council, a preliminary investigation by Lebanese authorities into the devices concluded that the explosives were planted in them before they arrived in the country.
Counterfeit products
But at the moment, there is no certain information other than that. It is not clear how or when the pagers and walkie-talkies were booby-trapped so that they could be detonated remotely.
Part of the problem is that smaller brands tend not to invest heavily in monitoring counterfeit products, partly because the costs can affect their profitability, said Joe Simon, a partner at Chinese intellectual property services firm East IP.
“The authorities are fine with low-tech counterfeit products, but IP owners need to monitor, investigate and file complaints, and this doesn’t always happen as much as it might with larger, high-tech brands,” he added.
For Icom, one problem is that it stopped making the IC-V82 in question about 10 years ago, around the time it started using holographic labels to protect against counterfeiting. The company has repeatedly warned against counterfeit products, especially of its older models.
According to the latest available report from the Japan Patent Office, more than seven percent of companies in Japan reported business losses due to counterfeit products in 2020, with about a third of the cases linked to China.
Icom urged customers to use only its network of authorized distributors to ensure they are purchasing genuine products.
