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Analyst says iPhone 4's US sales injunction could cost Apple billions
- — 05 June, 2013 20:26
Noted Jefferies analyst Peter Misek said in a research note today that the US International Trade Commission's injunction against the sale of the iPhone 4 could deprive Apple of as much as $2 billion in revenue.
The U.S. ITC ruled Tuesday that the iPhone 4 and several older models that Apple doesn't sell anymore infringed on a patent held by Samsung, while dismissing three other claims made by the South Korean company, issuing a ban on the importation of Apple's Chinese-made devices.
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However, the sales injunction will not go into effect immediately the ruling provides for a 60-day grace period during which the White House and the Federal Circuit Court of Appeals can overturn the ban. The AP reports that President Obama opposes this type of import ban, and that his administration has urged lawmakers to curb the ITC's power to impose them.
However, patent lawyer Lyle Vander Schaaf told Bloomberg that the administration's stepping in would be an unusual move.
"Historically, the president does not interfere in these sorts of things. It shows the commission is a very bold agency that they are willing to take these steps despite the popularity of the Apple products," he said.
The impact, according to Misek, could be severe, cutting Apple's sales by 2 to 3 million units per quarter if the ruling isn't overturned, at least until the company rolls out its expected revamp this fall.
"After the iPhone refresh, we would expect the iPhone 4S to become the entry-level model and the issue would be resolved. In the meantime, if Apple were to remove the iPhone 4 and lower the price of the iPhone 4S, there would be a clear margin impact," he wrote, estimating the potential lost revenue at between $1 billion and $2 billion.
Misek does say, however, that the chances of the injunction being overturned may not be as remote as they seem. As the patent in question is considered standard-essential that is, its use is required in order to comply with a technical standard, and as such, has to be licensed on fair terms by the holder it's possible that the White House or the appeals court could step in.
Email Jon Gold at firstname.lastname@example.org and follow him on Twitter at @NWWJonGold.
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