Apex Digital, David Ji, Chinese law

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Apex Digital, David Ji, Chinese law

While not directly related to PVRs, I submit this news as I believe it to be of note.

Some of the longtime readers of PVRblog may remember news about the $30 DVD player or the ApeXtreme, a combination PVR and game system, both which were released by Apex Digital. I was amazed at the growth of Apex Digital and wrote on this site back in March 2004,

It is incredible to think of a company less than 5 years old, with about 100 employees, selling over $1 billion, being second in marketshare to Sony (at least within the category of DVD players.) Apex seems to have converged at a point between the globalization of manufacturing and labor, the distribution of big-box retailers in America, and this "bargain culture," by providing product cheaper than any other competitor.

Well, it turns out it was too good to be true.

The New York Times has a fascinating front-page article about David Ji, a naturalized Chinese-American electronics entrepreneur and co-founder of Apex Digital, who is currently being held in China in legal limbo and against his will. Apex Digital did business with Sichuan Changhong Electric, a publically-traded entity that is majority owned by the city of Sichuan. Changhong claims that Apex owes it $470 million whereas Apex claims that it owes Changhong less than $150. All of this is moot because Apex is close to bankruptcy.

China has attracted hundreds of billions of dollars in foreign investment and has become the world's third largest trading power. But its legal system, even when handling nonpolitical business cases, has progressed far more haltingly and still rarely backs investors or ordinary citizens against the state.

Difficulty enforcing contracts, rampant violations of copyrights and trademarks and protection of domestic industry champions have heightened trade tensions at a time when China is struggling to convince the outside world that its growing economic might poses no threat. Beijing is under heavy pressure to embrace global legal norms with the same fervor with which it has pursued foreign trade.

Courts and arbitration panels do resolve many business conflicts that arise from China's thriving market-oriented economy, and they can rule professionally and impartially. But when the fate of powerful companies like Changhong, which has 36,000 employees, lies in the balance, the judicial system does not act independently and offers no recourse for outsiders like Mr. Ji.

Ultimately, some legal scholars argue, China's legal system may not improve markedly until central and local government officials relinquish some control and stop putting short-term political goals, like protecting influential companies and suppressing dissent, above the law.

This reads like a primer on how not to do business in China, which is all the more interesting because the founders of Apex Digital are both natualized Chinese-Americans.

Dispute Leaves U.S. Executive in Chinese Legal Netherworld - New York Times

by Gen Kanai November 1, 2005 in News

Comments

Garrett Rogers speculates that Google may be launching a DVR.
http://www.being-reasonable.com/

Posted by: Marc Babej at Nov 1, 2005 9:38:26 AM

I always thought Apex was too good to be true. They sold products so cheap they were either on a razor thin margin, or losing money, and they repeatedly violated the DVD Forum's licensing by 'accidentally' leaving backdoors in their code to allow region hacking, Macrovision disabling, etc - which made them popular with the modders, but landed them in hot water with the DVD Forum again and again. And the ApeXtreme really never made sense to me, I couldn't see it being commercially viable. Like the Gizmondo trying to compete with the PSP - a joke.

Posted by: MegaZone at Nov 1, 2005 10:48:11 AM

Does anyone think this David Ji fellow needs some support? A recent article in Forbes (dated 10/27/2005) indicates that he's being held under duress in China.

I think this is a lot more serious than some kid being caned. Whether he's guilty or not, the U.S. shouldn't stand for one of its citizens being treated like a criminal, without a trial or due process, in the legal system of one of the U.S.'s leading trading partners.

How come David Ji hasn't gotten more attention and help so far? Is it because he's not white?

Posted by: BizGuy at Nov 2, 2005 5:16:10 AM

Well I am sorry to hear about David Ji's problem....but I have a $600 LCD TV that broke after 1 month and the customer service department has stalled ,lied to me for 6 1/2 months..I can kiss the money good bye...Never buy from Circuit City...they told me to go to hell too....Never buy a brand you don't know....

Posted by: G Witten at Nov 4, 2005 4:13:48 PM

What a piece of crap!!! I bought a TV and that never worked. Circuit City said I had to call the manufactorer even tho it didn't work after 1 week.Good luck. They have 50 people in customer service or I should say 50 clowns. Yes I agree with the last message- kiss the money goodbye. THere is not a chance I will ever get this fixed or replaced. This company sucks.
Mike

Posted by: Mike Taylor at Nov 4, 2005 4:17:59 PM

David Ji is a crimminal for committing fraud, it is that simple! So what if he is a US citizen, that does NOT give him some sort of special immunity.

Posted by: Diunei Guailau at Nov 6, 2005 1:04:10 PM

David Ji is a con man. He got products for Chinese manufacturers on credit, and sold them in America promising to pay back but never did. It's a con game that finally went bad. As simple as that. Of course he is being held against his will. All criminals are.

Posted by: intheknow at Nov 8, 2005 9:26:21 PM

Some corrections. Only one founder is Chineese. The other is from Taiwan. The press does not cover that the manufacturer has not supplied parts for repair in 4 years, and apex had to give refunds because they could not supply repair parts. They also do not cover all the defective televisions that apex shipped back to change hong and never received credit. Nor do they discuss the fact that if a product is inferior, why the manufacturer does not share in the loss. Chang Hong left apex out to dry.

Posted by: virginia at Nov 10, 2005 1:32:56 PM

Of Course Apex Digital was too good to be true, I got burned......... Try getting service done on one of there TV's not a chance, it wont happen, they dont even have parts to fix them if they wanted to. There goes good hard earned AMERICAN money down the drain to support a common criminal.

Posted by: Laura MacLennan at Nov 15, 2005 9:25:42 AM

No need to feel sorry for David Li. He is just as much of a criminal as the people he was doing business with in China. Trust me, that is how business is done in China. It is crook vs. crook over there, just like spy vs. spy is in Mad magazine. David Li just got out-conned by a bunch of better Communist crooks, that's all.

A bit of free advice for everyone. If you are an honest businessman, do not do business in China!!! They do not consider honesty in business a virtue over there. They will look at you as some kind of a fool that deserves to be out-witted and taken advantage of by them.

Another thing. The U.S. does not need to bend over backwards to help David Li. Even though he is a naturalized U.S. Citizen, people like him, those who immigrate to the U.S. but then goes right back to China to "DO BUSINESS", feels no loyalty or obligation of any kind to the United States of America. They only care about making money. To him, his U.S. citizenship just means that he has a nice country to escape to incase things go bad for him in China. I'm sure David Li would gladly trade his U.S. citizenship in for a Canadian one or a Brazilian one if thought he would get a better deal from those countries.

Another dirty little secret they don't like to talk about in China. Did you know that all of the wealthy or powerful people in China all have foreign passports? Even those in the Communist party! That shows you how much real confidence they have in China. You don't see Bill Gates or Donald Trump with a French passport, do you?

Posted by: King Hiro at Nov 16, 2005 6:53:41 PM

From the beginning I also thought this company was too good to be true. The co-owner from Taiwan is actually my uncle, and he sent me dvd players, and the first few models didn't even work. And the idea with ApeXtreme is totally wack and dumb. I can't understand how they even thought they could find a market when they wanted to compete with playstation and xbox.
Does anyone think this company could ever rebound?

Posted by: Anthony at Nov 18, 2005 2:43:09 AM

I saw that you have a page that discusses patent-related resources at http://www.pvrblog.com/pvr/2005/11/apex_digital_da.html. I wanted to suggest adding www.freepatentsonline.com to the page. This web site has free PDF downloading (instead of having to page through TIFFs like at the US PTO). It is by far the best free patent searching site.

Posted by: James at Aug 4, 2006 1:29:58 PM

Well, I've had opportunites to try out Apex products. I've even had opportunities to repair Apex products.

People, one reason these things sell cheap is because they ARE cheap. Very poor parts selection, sloppy engineering, and substandard assembly are hallmarks of Apex and other similar brands of products such as Coby, Norcent, Initial, iLo, Vizio, and the like. Further, as evidenced by plenty of consumer and servicer claims, service and support are virtually non-existent. Customers are essentially not supported when they need assistance and servicers cannot obtain service manuals and repair parts for these products. They are designed, from the get-go, to be thrown away when they stop working. You certainly do get what you pay for in this case.

If you really want to be frugal in your purchases, then spend the extra cash and buy something that's actually built to last long enough for the money to be well-spent. These products are supposed to be long term investments, not short term throwaway purchases.

The only low-cost electronics company that seems to give jack about quality of product and service is Oppo Digital. Otherwise, stick with a brand that is backed with experience in the field, such as Sony Corporation and Matsushita Electric (Panasonic). - Reinhart

Posted by: Reinhart at Oct 27, 2006 11:50:23 AM

You have to thank companies like Apex for mixing it up a bit. My sub 30 dollar Apex Digital DVD player rarely rejects a recordable DVD format while my 400 dollar Sony DVD player is pretty much for pressed, store bought DVDs only. It took the Japanese to light a fire under American car manufacturers in the seventies and I see this as good healthy competition between the Korean, Japanese, and Chinese electronic manufacturers. Remember when Sony or Samsung were considered junk?

Posted by: Bob at Nov 18, 2006 6:54:25 PM

Although I understand how people thought David Ji was nothing but a fraud and his business a scam, I thought I heard the charges he was accused of were dropped in China. I tried to find out if he was still there, but was unable to do so. Anyone know?

Posted by: Todd Lokken at Apr 10, 2008 9:07:00 AM

Apex Digital, David Ji, Chinese law

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