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Munster On Apple: Beijing's iPhone Ruling Irrelevant To Numbers

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Munster On Apple: Beijing's iPhone Ruling Irrelevant To Numbers
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Apple Inc. (NASDAQ: AAPL) shares are under pressure Friday morning. Wall Street Journal reported Beijing's intellectual property regulator ordered the company to cease selling its iPhone 6 and iPhone 6 Plus in the city because the phone's design is too similar to a smartphone manufactured by a local company.

In a statement, Apple responded, "iPhone 6 and iPhone 6 Plus as well as iPhone 62, iPhone 6s Plus and iPhone SE models are all available for sale today in China. We appealed an administrative order from a regional patent tribunal in Beijing last month and as a result the order has been stayed pending review by the Beijing IP Court."

Piper Jaffray analyst Gene Munster remained Overweight on the company's stock.

Related Link: iPhone Shipments Are Bottoming, Says Brean

"We note that the ruling appears to be only for the Beijing region and not all of China," Munster said in a mid-morning note. "The bottom line is that the ruling is unlikely to have any impact on numbers because the iPhone 6 and 6 Plus model will be discontinued in September with the launch of the iPhone 7, and we expect the appeal to last through that period.

Munster noted that even if the device were banned in China for the September quarter, "it would likely be no more than a 2-3% iPhone unit headwind, or a 1-2% revenue headwind, just for the September quarter."

The stock traded recently at $95.64, down 1.9 percent on the day. Munster holds a $153 price target on shares.

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May 2018BMO CapitalMaintainsMarket PerformMarket Perform
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May 2018BarclaysMaintainsEqual-WeightEqual-Weight

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