Yes, especially with phones. Not even discussing iPhones, Android phones are very simple to counterfeit. The software is out there for anyone to use, so all anyone needs to do is copy the case design and find an off-the-shelf chipset that's readily available on the market that matches or near matches the phone being cloned. Plus software can be modified to trick the user into thinking there is more storage than actually exists. This used to be a big deal with USB drives when they were much more expensive. You could take, say a 500MB drive and program it to make a computer think it was 4 or 8 GB. You'd only have issues when trying to use that space. Same with SSD hard drives, which have finally come down in price as they are more popular. With watches, you could even have some real Rolex components but a Chinese or Japanese clone movement. Think about how many people want a Rolex just because it says Rolex? Would they even know what to look for in the movement?
The Chinese are very good at counterfeiting stuff. They're getting better at gun parts as the government opens up the market more and more, allowing more companies to compete for government contracts. And in some cases these products are authentic that failed QC. Company is making them in China, throws them out, someone digs in the dumpster or nearby river and pulls them out, resells them.
I understand the Chinese counterfeits.. I mean taking the inside of a good optic ot and replacing it with a Chinese counterfeit? Is that a big problem like you referenced?? I have never heard of such a thing...