How Beijing Patent Ruling Will Impact Apple Inc. (AAPL)?

Beijing’s intellectual property regulator has ordered Apple Inc. (NASDAQ:AAPL) to stop sales of the iPhone 6 and iPhone 6 Plus in the city, ruling that the design is too similar to another smartphone sold within China (Shenzhen Baili’s 100c device), leading to the possibility that Apple may have to cease sales of its handset in Beijing completely.

So what impact will the ruling have on the tech giant? BMO Capital analyst Tim Long does not believe the impact of the ruling is meaningful. The analyst noted, “The ruling is limited to models released nearly two years ago, and does not seem to include recent phones like the 6S or the SE. Additionally, the ruling may only relate to sales in Beijing.” That said, “We believe all sales are continuing as before, possibly because Apple has filed an opposing motion.”

“We believe there have been several prior cases against US companies ruled in favor of local companies by lower courts that were later overturned by higher courts.We have seen dozens of court decisions banning different smartphone products over the years in many different countries. We are not aware of one ever that has resulted in an actual injunction,” the analyst continued.

The analyst reiterated an Outperform rating on shares of Apple, with a price target of $118, which represents a potential upside of 23% from where the stock is currently trading.

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Tim Long has a yearly average return of 3.7% and a 49.4% success rate. Long has a -4.3% average return when recommending AAPL, and is ranked #914 out of 3976 analysts.

Out of the 52 analysts polled by TipRanks, 40 rate Apple stock a Buy, 10 rate the stock a Hold and 2 recommend a Sell. With a return potential of 32%, the stock’s consensus target price stands at $127.12.


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