January 28, 2021

China forbids Apple to sell several of its models after a complaint by Qualcomm | Economy

China forbids Apple to sell several of its models after a complaint by Qualcomm | Economy

Apple's patent battle with Qualcomm is further complicated, after a court in China ordered to block immediately sales of several of the iPhone's models in the country.

The judicial decision represents a major legal setback for the Cupertino technology, which strongly opted for the Chinese market to boost revenues while sales stagnate on a global scale. Apple shares fell 2% after the announcement, but then moderated losses. The models affected by this injunction of the court of Fuzhou are the iPhone 6S, the iPhone 6S Plus, the iPhone 7, the iPhone 7 Plus, the iPhone 8, the iPhone 8 Plus and the iPhone X.

US processor maker Qualcomm insists it seeks to protect its intellectual property rights. Qualcomm wants its customer, Apple, to compensate it adequately for the use of its technology. Specifically the decision refers to two patents used in the manufacture of the iPhone, the flagship product of the firm that runs Tim Cook. One allows to change the size of the photographs. The other, serves to manage applications.

Apple states that it only affects devices with the iOS 11 operating system, which was launched in 2017. The latest models use a higher version.

Wall Street analysts anticipate that the impact on Apple's results will be minimal, since they estimate that the models affected by the ban currently account for 10% of sales in the region. The Chinese market generated revenues of 11,400 million dollars in the fourth quarter, 16% more than in the same period of 2017.

The complex legal battle between the two multinationals encompasses other jurisdictions in which phones are sold. Apple, nevertheless, denies any violation and responds by assuring that it will resort to all the possible "legal options" that it has to appease Qualcomm's maneuvers. Moreover, it considers that this type of action highlights the desperation of the company and recalls that "its illegal practices are being investigated by regulators".

The decision of the Chinese court is preliminary. The Chinese market is of vital importance for Apple, so it is not ruled out that both companies reach an agreement.


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