China may be among Apple’s greatest revenue opportunities, but it also continues to present challenges. Most recently, that included the loss of the exclusive use of the word “iPhone.”
The Beijing Municipal High People’s Court has ruled against Apple in a trademark dispute, granting authority to the Beijing Xintong Tiandi Technology Co. to use the iPhone name on its wallets, smartphone cases and other leather goods.
The ruling occurred in March but was only recently circulated.
According to a document posted in the Chinese language Legal Daily, Apple filed to trademark “iPhone” on Oct. 18, 2002, but the request wasn’t approved until Nov. 21, 2013.
Xintong seems to have applied for and received its trademark in 2007.
“Apple is disappointed the Beijing Higher People’s Court chose to allow Xintong to use the iPhone mark for leather goods when we have prevailed in several other cases against Xintong,” a spokesperson for Apple told the BBC.
He added, “We intend to request a retrial with the Supreme People’s Court and will continue to vigorously protect our trademark rights. We work hard to make the best products in the world and want to ensure our customers’ experience is not compromised by companies who try to profit from using our brand.”
According to the BBC, Legal Daily is considered a “mouthpiece for the country’s Central Political and Legal Affairs Commission.”
Challenges in China
In March, the Beijing government ruled that all digital content shared in China must be stored in servers based on the mainland. Soon afterward, consumers in China were cut off from the Apple iBooks Store and iTunes Movies services. Those who visited the content found only a message saying they were “unusable,” according to Reuters.
The new law is thought to be a way to encourage the use of services and content from China-based providers like Alibaba and Tencent.
On April 29, billionaire investor Carl Icahn sold his stake in Apple, citing concerns about Chinese government interference and economic slowdown in China.
Icahn told CNBC that he made roughly $2 billion on his sales of Apple stock, and that were China to become more “steadied,” he would buy back in.
During Apple’s most recent earnings announcement, CEO Tim Cook said that Apple Pay had a successful launch in China in March, and that 80 percent of customers there are purchasing their first Macs. During the March quarter, Apple opened seven new stores in China, bringing its total to 35, and it plans to open five more during the current quarter.
“I think China is not weak as has been talked about,” Cook said during the April 26 call. “I see China as maybe not having the wind at our backs that we once did, but it’s a lot more stable than what I think is the common view of it. So, we remain really optimistic on China.”