Apple Says iPhones Still For Sale In China After Ruling In Qualcomm Case


Apple said Monday that older models of the iPhone will continue to be sold in China with new software, seemingly providing a work-around to avert a court-ordered ban on the sale of certain iPhone models in the country.

As part of a patent dispute between chip maker Qualcomm and Apple, a preliminary order from the Fuzhou Intermediate People's Court in China has banned the sale of iPhone models from the iPhone 6S up through the iPhone X.

[Related: Apple Infringes Qualcomm Patent, Federal Judge Says]

The ban stems from a finding in the court that Apple violated two software patents held by Qualcomm, related to photo resizing and app management on a touch screen. According to a statement provided to Reuters, Apple will continue selling all iPhone models in China with updated software. Apple did not immediately respond to a request for comment from CRN on Monday.

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"Qualcomm's effort to ban our products is another desperate move by a company whose illegal practices are under investigation by regulators around the world," Apple said, according to the statement provided to Reuters.

Apple has also filed an appeal of the ruling, according to a CNBC report.

Qualcomm general counsel Don Rosenberg provided a statement to Reuters arguing that Apple "continues to benefit from our intellectual property while refusing to compensate us." Qualcomm did not immediately respond to a request for comment from CRN on Monday.

The ruling is the latest in a series of legal volleys between Qualcomm and Apple—formerly key partners--over several years. In September, Qualcomm accused Apple of stealing Qualcomm trade secrets and giving them to Intel. That same month, a judge at the U.S. International Trade Commission found that Apple infringed one Qualcomm patent.

For the China ruling, "we continue to believe today's news is more noise than a fundamental impact, although it will add to the black clouds over Cupertino until investors hear from the company in January," wrote Daniel Ives, managing director for equity research at Wedbush Securities, in a note to investors Monday.

"According to Apple's statement there should be no disruption to the models Chinese consumers can purchase, although this remains up in the air given the mixed messages and reports coming out of China this morning," Ives wrote. "In a nutshell, with China being a linchpin of growth for Apple around iPhone sales any further dent in the armor at this juncture is not what Apple or investors wanted to see given the headwinds around sales of its latest XR model."

Apple’s stock price was down 1.9 percent, to $165.29 a share, as of late morning Monday.

According to a Bloomberg report last week, Apple has re-assigned marketing staff from "other projects" to work on improving sales of iPhone, amid a slowdown in iPhone demand that has sent Apple shares plunging since early November.

Meanwhile, in November, President Donald Trump told the Wall Street Journal he has been considering expanding tariffs on imported goods from China to include Apple's iPhones.