Apple has hit a setback in China after the country’s regulator for intellectual property upheld a claim that the iPhone 6 and 6 Plus infringe on an exterior design patent held by a Chinese company.
Shenzhen Baili has claimed that the aforementioned models of iPhone bear too close a resemblance to its 100C smartphone. Apple has stated that all iPhone models are still available in China in the wake of reports that the IP tribunal had blocked sales of the devices in question.
China has proven a difficult market for Apple; the tech giant has faced so many hurdles in the market that CEO Tim Cook recently met with a number of high-ranking Chinese officials in an attempt to ease the relationship between the parties. The firm is also plagued by a slowdown in growth across the globe.
The Chinese courts have frequently ruled against Apple, for example in May this year when a local company was allowed to continue using the iPhone brand for its wallets and purses after a long dispute. Apple is contesting the ruling, but has to acquiesce to an order in April to cease offering its online book and movie services to comply with online content regulations.
The governmental interference has not gone unnoticed by investors, with noted activist investor Carl Icahn withdrawing all of his interest in Apple in the face of the company’s Chinese woes and economic downturn. Apple’s problems in China echo those experienced by Google, which eventually withdrew from the market in 2010. SeekingAlpha commentator Bram de Haas noted that “it seems naïve to expect Apple to [more] easily manage its relationship with PRC than Google did.”
Apple saw its first quarterly drop for 13 years in Q1 this year, with iPhone sales dropping 8% in China during this time. Analysts have noted that since the iPhone 6 and 6 Plus have been dropped by many Chinese stores, the IP tribunal should have a significant effect – particularly as Apple will soon cease production of these models. That said, the ruling demonstrates the Chinese government’s interference with Apple’s operations.
China is the company’s number two market after the US.