Any hardware company makes big chunk of its profits off accessories rather than the product itself. R&D that went into making an iPod barely make room for per-product return.
Most of Apple's accessories are manufactured in China. I guess the market got heated so much, that entering barriers for accessory business became too high. So someone decided to flood the market with the product first.
Would be a perfectly viable idea, if Apple wasn't sitting on 76 billion of cash. I smell new product soon. With features different enough, that re-setting production lines of 'em Chinese fakers will drive them out of business. If legal teams don't make it first.
These fake Apples are wasting their money. Better be making extra batteries and headphones. I always suspected some Chinese suck at entrepreneurship.
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