Apple faces another threat to its competitive position in China after Beijing’s intellectual property regulator ruled the design of its iPhone 6 and 6 Plus infringes on an exterior design patent held by a previously unknown Chinese firm.
Earlier reports said the IP tribunal had banned sales of the two models in Beijing over the infringement case, but Apple said in a statement that it immediately appealed the ruling and all iPhone models are still available for sale throughout the country.
Shenzhen Baili accused Apple of infringing on a design patent, claiming the iPhone 6 and 6 Plus look too much like its 100C smartphone.
Apple has faced a number of legal obstacles in the mainland as well as slowing growth globally, and in May CEO Tim Cook met with high-level Chinese officials in Beijing to try to reduce tension.
In April the Chinese government demanded it shut down its online book and movie services after the country’s video and publishing regulator imposed stricter guidelines on online content and a court ruled in early May that a local firm can continue to use the iPhone name on its wallets and purses after a long-running battle with Apple, which is appealing the ruling.
Activist investor Carl Icahn recently pulled out his entire investment in Apple due to concerns about China’s economic slowdown and possible interference from the government. Some analysts believe Apple could face the same types of obstacles in China that forced Google to pull out in 2010. SeekingAlpha commentator Bram de Haas said: “It seems naïve to expect Apple to [more] easily manage its relationship with PRC than Google did.”
The Cupertino-based company, which in Q1 suffered its first quarterly revenue drop in 13 years, reported iPhone sales in China, its second largest market after the US, declined 8 per cent in in the quarter.
Given that the iPhone 6 and 6 Plus are no longer available in many stores in China and Apple plans to stop production of the models soon, analysts said the impact of the ruling won’t be significant, but the case is yet another example of how China regularly attempts to undermine Apple’s businesses in the mainland.
In May Apple invested $1 billion in China’s largest ride-hailing app Didi Chuxing, a move likely leading to an integration with Apple Pay and also designed to work closer with local players to strengthen its position in the country. But it’s also seen as an attempt to improve its relations with the government.