It depends on the temperament of the buyer. I've already acknowledged that I was in the wrong so I'm waiting to see if he would like a partial refund.

Regarding drop-shipping from China - I have samples sent to me to confirm that they are shipping a genuine product.

If the buyer escalates this case to eBay, I think eBay would find me at fault. Partial refund while letting him keep the phone seems the best solution. Thanks again.