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Patent dispute could block Apple's iPhone 6 sales in Beijing

SAN FRANCISCO — Apple is embroiled in a patent dispute in China that threatens to block future sales of the iPhone 6 in Beijing unless the company can overturn a regulator's recent ruling.

The potential ban stems from a decision issued last month by the Beijing Intellectual Property Office. The agency found the iPhone 6 and iPhone 6 Plus infringed on a patent for the exterior design of a smartphone called the 100C made by a Chinese company, Shenzhen Baili.

Apple Inc. is still being allowed to sell both of the affected iPhone models while it appeals the ruling to an intellectual property court in China.

If it loses, Apple could be forbidden from selling some of its most profitable iPhones in China's capital at a time when sales of the entire iPhone line have been declining.

The downturn is the main reason that Apple's stock has fallen by 9 percent so far this year while the Standard & Poor's 500 index has edged up by 1 percent. Apple's shares dropped $2.10, or about 2 percent, to $94.45 in Friday's late afternoon trading.

The patent dispute is Apple's latest headache in China, the company's second-biggest source of revenue after the United States and one of its fastest-growing markets. China accounted for 26 percent, or $61 billion, of Apple's revenue last year, up from 12 percent in 2011, based on calculations by RBC Capital Markets analyst Amit Daryanani.

In April, China's government blocked Apple's books and movies services after finding they violated the rules covering foreign publishers. The Cupertino, Calif., company also lost a fight this year to keep the exclusive rights to the iPhone name in China.

In a Friday research note, RBC's Daryanani predicted the patent dispute with Shenzhen Baili wouldn't depress Apple's revenue or profit margins in China.

Patent dispute could block Apple's iPhone 6 sales in Beijing 06/17/16 [Last modified: Friday, June 17, 2016 8:57pm]
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