Smartphone Company
Apple is facing yet another stumbling block in China. An intellectual property agency in the country’s capital recently ruled that both the iPhone 6 and 6 Plus have breached a design patent by one of the smartphone manufacturers in China. IP authorities discovered that the older versions of these iPhone units appear far too similar to the 100C, a smartphone created by Shenzhen Baili – a Chinese-owned company. Baili is among the many smartphone manufacturers making a huge profit from China&’s growing mobile demand. Because of this, Apple was directed to quit selling the units in question in Beijing.
As a counter move, Apple had already appealed the order. The ruling has been stuck throughout the appeal process. This means that for the time being, the sales for the iPhone 6 and 6 Plus will Continue. Oddly enough, the ruling isn’t applicable to the most updated models of iPhones even if they bear much resemblance to the older handsets.
Also, Apple is anticipated to launch new models of the iPhone this coming fall. Based on experts and vendors who sell iPhones in China, some gadget outlets in Beijing have already stopped marketing the 6 and 6 Plus units several months ago to accommodate the newest models. But even with the appeal, tech sites noted that the patent verdict can bring in broader ramifications. For one, while the ruling only covers the countrys capital, future legal cases against Apple may take the verdict as a precedent, likely affecting the outcome of lawsuits in places other than Beijing.
Apple’s Setbacks in China
The general purpose and consequences of Beijing’s verdict are not fully apparent yet, although it’s the latest of Apple’s hitches in China, which holds the largest smartphone market in the world.
Just this April, Chinese regulators banned the companys iTunes Movies and iBooks Store. The following month, a Beijing court afforded a Chinese company that specializes in leather goods the legal right to use iPhone as a name/label on its accessories, which undercuts Apples distinctive right to the trademark. In 2012, Apple compensated $60 million to resolve a similar claim in China over the label rights to the iPad name.
But since the judgment is applicable only to the revenue in Beijing, experts doubt the verdict will have a serious impact on the company’s net profit. In a research report made by RBC Capital Markets, specialists noted that the ruling would have no noteworthy negative influence on Apple’s earnings and perimeters in China. Another analyst, Gene Munster of Piper Jaffray, stated the road block just shows the recurring friction between iPhones manufacturer and the Chinese authorities.
While Apple seems to have an ongoing tiff with China, Chinese shoppers are very much ecstatic with the companys units. Revenue in Greater China came to 25% of the companys earnings in the second fiscal quarter. Also, Apple has significantly cashed in on the smartphone demand in China. The iPhone units make up two-thirds of the overall earnings of Apple, and in China, iPhones are seen as a symbol of status.
Cesar is a Product Manager at Gadget Salvation, a leader in the refurbished electronics industry. An avid technology enthusiast, he’s always on top of the latest tech trends and applies that knowledge to drive product innovation.
