China bans the sale of iPhones

A Chinese court order instructing Apple to stop sales of its iPhones in China ups the ante on the US technology giant in one of its biggest markets, amid revenue pressures and declining smartphone growth globally.

On Monday, a statement from Qualcomm said the Fuzhou Intermediate People’s Court had granted the US chip maker’s request for two preliminary injunctions against four subsidiaries of Apple, ordering them to immediately stop selling models from the iPhone 6S to iPhone X.

If upheld, the court ruling could adversely impact Apple’s revenues as Greater China – which includes mainland China, Hong Kong, and Taiwan – is currently the US company’s third largest market, accounting for about a fifth of Apple’s revenues. In its latest financial year, Apple racked up over US$260 billion in global sales.

Apple’s most recent phone models, which include the iPhone XR and iPhone XS, are not included in the ruling, as these devices were not released when the suit was filed in 2017.

Apple said in a statement on Monday that “all its iPhone models remain available” for customers in China, and has filed a request for reconsideration with the court as a first step to appealing the preliminary injunction.

It called Qualcomm’s effort a “desperate move by a company whose illegal practices are under investigation by regulators around the world”, adding that Qualcomm “is asserting three patents they had never raised before, including one which has already been invalidated”.

The timing of the court order comes amid the ongoing US-China trade war and rising nationalist sentiment among China’s consumers, with more turning to Chinese smartphone brands such as Huawei.

In recent years, Apple’s market share in China has declined from 15 per cent in the fourth quarter of 2017 to 9 per cent in the third quarter of 2018, according to Counterpoint Research. The decline also comes as smartphone growth matures on the Chinese mainland.

Chinese smartphone makers Vivo, Oppo, Huawei Technologies, Huawei’s sub-brand Honor and Xiaomi ranked top five in China, the world’s largest smartphone market, in the quarter ended September. Apple came in sixth, according to Counterpoint. The court order to halt iPhone sales could further set Apple back in the mainland China market, traditionally seen as an important market for the company.

If the court order is enforced, Apple will lose out in the category of smartphones priced below 7,000 yuan (US$1,013), giving brands like Huawei a big advantage to fill the gap, according to IDC China managing director Kitty Fok.

source:internet