Beijing patent ruling unlikely to hurt Apple in China, RBC & Piper Jaffray say

Posted:
in AAPL Investors
A new patent decision accusing Apple of copying the design of a Chinese-made smartphone will not have a negative effect on Apple's revenue or margins in China, two major investment firms said on Friday.



Following the news that the Beijing Intellectual Property Office ruled against Apple, determining the iPhone 6 and iPhone 6 Plus are too similar to the 100C phone from Shenzhen Baili, both RBC Capital Markets and Piper Jaffray weighed in with notes to investors, and neither of them expressed any concern.

RBC analyst Amit Daryanani said he expects "business as usual" for Apple in China, with "no impact" from the Beijing case. He noted that China intellectual property laws allow Apple to continue selling both the iPhone 6 and iPhone 6 Plus during the appeal phase.

In addition, if the court ultimately rules against Apple in its final decision, it will only apply in the city of Beijing -- iPhone sales across the rest of China would be unaffected.

Gene Munster of Piper Jaffray is also unconcerned, and noted that Apple will likely discontinue both the iPhone 6 and iPhone 6 Plus models in September, alongside the launch of the anticipated "iPhone 7." With the newly launched iPhone SE occupying the entry level of Apple's lineup, he believes the two-year-old iPhone 6 series is on the way out.

"Even if the device were banned through all of China for the (September quarter), it would likely be no more than a 2-3% iPhone headwind, or a 1-2% revenue headwind, just for the September quarter," Munster wrote.

Daryanani does expect that the average selling price of the iPhone will trend lower in China, but that has nothing to do with the new ruling. Instead, he believes traction being gained by the iPhone SE could push ASPs lower in calendar year 2016, down from $642 last year toward $633 this year.

With Apple still struggling to keep up with demand for the iPhone SE, Daryanani estimates that the 4-inch handset could account for as much as 25 percent of total iPhone shipments for the June and September quarters.

RBC has maintained a price target of $115 for AAPL stock with an "outperform" rating, while Piper Jaffray is more bullish, with a $153 target and "overweight" rating.

Comments

  • Reply 1 of 14
    Beijing Intellectual Property Office = extreme oxymoron
    ANVICOMSpamSandwichjbdragon
  • Reply 2 of 14
    ANVICOMANVICOM Posts: 1member
    Now you see:p :p :p :p :p Now you don't
    edited June 2016
  • Reply 3 of 14
    Many American companies are going to find out that the China miracle was just a mirage. How anyone can think they can predict what will happen in a pure dictatorship is pure folly. This is a country that militarily, politically, and socially is opposed to the US in almost every conceivable way. Yet Apple and hundreds of other companies count on China as the next big thing. China is trying to goose its own companies to become world leaders. It will do this by blocking foreign companies from getting too powerful on the mainland. 
    ANVICOM
  • Reply 4 of 14
    SpamSandwichSpamSandwich Posts: 29,331member
    ANVICOM said:
    Now you see their true color... think think think deeper... Shouldn't help them in first place... should help India first...
    China and India are both IP black holes.
    ANVICOMjbdragon
  • Reply 5 of 14
    bobschlobbobschlob Posts: 1,074member
    ""Even if the device were banned through all of China for the (September quarter), it would likely be no more than a 2-3% iPhone headwind, or a 1-2% revenue headwind, just for the September quarter," Munster wrote."

    Gene, you really need to learn when to just keep your mouth shut. Sometimes it's better to just not say anything at all on a specific point of a specific issue.
    edited June 2016 ANVICOM
  • Reply 6 of 14
    tzeshantzeshan Posts: 1,670member
    Pretty soon Huawei will sue Apple for copying the dual camera design of P7 in iPhone 7 Plus.  Apple future innovation is in danger.  Because the sea of Google Android smartphone will exhaust all the new things Apple may choose to use.  It is probably more important Cook should properly research and license all the new things before incorporating in new iPhones.  
  • Reply 7 of 14
    flaneurflaneur Posts: 4,457member
    tzeshan said:
    Pretty soon Huawei will sue Apple for copying the dual camera design of P7 in iPhone 7 Plus.  Apple future innovation is in danger.  Because the sea of Google Android smartphone will exhaust all the new things Apple may choose to use.  It is probably more important Cook should properly research and license all the new things before incorporating in new iPhones.  
    I think Apple may have already thought of this approach. But by all means keep trying.
    magman1979
  • Reply 8 of 14
    zoetmbzoetmb Posts: 2,289member
    I think Apple should start implying to the Chinese Government that they're going to move manufacturing out of the country because of the hostile atmosphere.     
    magman1979palomine
  • Reply 9 of 14
    foggyhillfoggyhill Posts: 4,692member
    I can't believe this level of SHIT.  This is batshit crazy level of fracking nonsense..

    China is an IP Craphole.
    jbdragon
  • Reply 10 of 14
    sacto joesacto joe Posts: 618member
    PED lists Apple's response (Why didn't you, AppleInsider???):

    http://ped30.com/2016/06/17/apple-beijing-iphone-halt-patent/

    Apple: Reports of Beijing iPhone sales ban are bogus

    From Apple PR:

    “The reports aren’t accurate. Here’s our comment: iPhone 6 and iPhone 6 Plus as well as iPhone 6s, iPhone 6s Plus and iPhone SE models are all available for sale today in China. We appealed an administrative order from a regional patent tribunal in Beijing last month and as a result the order has been stayed pending review by the Beijing IP Court.”

    Also, as zzbar on Braeburn Group said:

    “I’m sure it’s pure coincidence that on this quadruple witching day, a month-old story just happen to surfaced on two major financial media outlet (Bloomberg and wsj). What are the odds that some guy sent wsj and bbg the link to Beijing IP bureau’s web statement dated May 19, 2016?”

    Here's a recent article on quadruple witching day:

    http://www.nasdaq.com/article/quadruple-witching-what-it-is-and-why-you-should-know-this-cm636995




    palomine
  • Reply 11 of 14
    1st1st Posts: 260member
    too similar? someone at the injection moulding company or design house leak the design? if it patented prior to 6 release within a year or so.... hmmm, intresting.... (with 3D printing and laser scan of the positive mould, any shape can be readily reproduced in a flash)... Patented?  Ha. I guess the risk assessment must skiped a beat.  
  • Reply 12 of 14
    foggyhillfoggyhill Posts: 4,692member
    sacto joe said:
    PED lists Apple's response (Why didn't you, AppleInsider???):

    http://ped30.com/2016/06/17/apple-beijing-iphone-halt-patent/

    Apple: Reports of Beijing iPhone sales ban are bogus

    From Apple PR:

    “The reports aren’t accurate. Here’s our comment: iPhone 6 and iPhone 6 Plus as well as iPhone 6s, iPhone 6s Plus and iPhone SE models are all available for sale today in China. We appealed an administrative order from a regional patent tribunal in Beijing last month and as a result the order has been stayed pending review by the Beijing IP Court.”

    Also, as zzbar on Braeburn Group said:

    “I’m sure it’s pure coincidence that on this quadruple witching day, a month-old story just happen to surfaced on two major financial media outlet (Bloomberg and wsj). What are the odds that some guy sent wsj and bbg the link to Beijing IP bureau’s web statement dated May 19, 2016?”

    Here's a recent article on quadruple witching day:

    http://www.nasdaq.com/article/quadruple-witching-what-it-is-and-why-you-should-know-this-cm636995




    So, we can't trust the Wall Street Journal and Bloomberg now for actual news; well, hey, should have known that.
  • Reply 13 of 14
    tzeshantzeshan Posts: 1,670member
    Details of the complaints by 100C listed as seven points described in this web page.  I wonder how the older iPhones already has these designs.  Whether Apple can countersuit 100C for copying older iPhone designs.
    http://3c.ltn.com.tw/news/24921
  • Reply 14 of 14
    tzeshantzeshan Posts: 1,670member
    Another Chinese web page.  http://news.91.com/apple/s5764d2772745.html

    It is strange the company message talked about not going to fire the design engineer on 11/26/2014.  The design engineer talked about the phone previously in another news.  
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