Apple eyes new stores in two Chinese cities as iPad suit continues

SHANGHAI Wed Jun 6, 2012 5:41am EDT

1 of 2. A man looks at his iPad while sitting in a cafe in central Beijing June 6, 2012.

Credit: Reuters/David Gray

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SHANGHAI (Reuters) - Apple Inc is looking to open flagship stores in the major Chinese cities of Chengdu and Shenzhen, government officials said on Wednesday, while it continues to fight a Chinese company over the use of the iPad trademark.

Opening stores in Shenzhen and Chengdu will be a big boost for Apple's China business, which currently has only five stores on the mainland, three in Shanghai and two in Beijing.

In April, Apple reported quarterly profit that almost doubled after a jump in iPhone sales, particularly for the greater China region.

But the possibility of selling iPads in Shenzhen could lead to more legal action after Roger Xie, a lawyer for Proview Technology (Shenzhen), told Reuters that if Apple tried to sell the popular tablets there, Proview would seek an injunction to stop them.

Apple and Proview are battling it out in the Higher People's Court in Guangzhou over the right to use the iPad trademark, which Proview contends it owns. Xie said both sides are currently undergoing court-mediated negotiations.

Apple's flagship stores are normally packed with people tinkering with the latest iPad or iPhone and its product launches draw huge crowds. But the company faces the problem of unauthorized re-sellers in less wealthy cities selling smuggled imports of its products.

Apple also faces a huge amount of piracy, a problem so pervasive in China that even entire fake Apple stores have been created where employees thought they actually worked for Apple.

Apple submitted documents on Monday to the Shenzhen government to open a store in Holiday Plaza, an upscale mall in the Nanshan district, according to an official with the Market Supervision Administration who would only give his last name as Ni.

"Apple is in the final stage and only needs to submit an environmental permit in order to gain approval," he said.

In Chengdu, in southwestern China, Apple received approval in late May to set up a business unit to handle retail sales and after-sales service, according to an official with the Chengdu Industry and Commerce Administration bureau.

An Apple spokeswoman declined to comment. Apple's China website showed that the company was hiring Apple Store sales staff in Chengdu and Shenzhen. (www.apple.com/jobs/cn/)

(Reporting by the Shanghai Newsroom and Melanie Lee; Editing by Matt Driskill)

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