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China Bullies US Companies Like Disney, IBM

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I’ve been picking on China this week but like little kids say, he started it. Today we were reminded about the dangers of doing business in the Far East. There was a rumor earlier flying around about the city of Beijing banning sales of the iPhone 6 because it’s too similar to a Chinese phone. 

So a company manufactures some iPhones, sells the plans to another factory which manufactures a different phone that looks just like the iPhone, then you want to penalize Apple? That’s actually pretty gangster. I believe they call that strong arming. Or black mail. Or gorilla pimping. Whatever you call it, it ain’t right. 

Apple responded with a statement today, commenting on a lower regional court decision saying their phone 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.”

Hello, US companies. The Chinese Government doesn’t give a shanghai noodle about your intellectual property. You think some piece of paper is going to sway the People’s Republic of China? There’s two ways of doing business in China. My way or the highway. Just ask Disney.

Wanna open a theme park? No Disney channel. Give up a big chunk of the profit. And leave out classic rides like Space Mountain because China doesn’t want your cultural imperialism. Unless its US dollars, then you can spread those around no problem. 

Everyone is making concessions just to get a piece of China. IBM promised to share their proprietary technology and Microsoft’s newly acquired LinkedIn agreed to sensor their news feed. It’s like when you meet your dream girl but she wants you to quit drinking, smoking, eating fast food and hanging out with your friends. Some guys fold like a pop up tent. Real men carry on the charade for a few weeks before she finally finds out. That’s right boys, hash tag, beard game strong. 

Don’t be surprised when you start seeing your products to the exact specifications using worse materials. Callaway Golf has been struggling with counterfeit Big Bertha drivers being sold worldwide. Somebody got ahold of the details of how to make it and decided to start pumping out Big Berthas made with plastic painted with a carbon fiber pattern rather than using the real thing. The result? More broken golf clubs than Tiger Woods’ windshield. 

Callaway’s managed to be the best of the bunch here with a Zacks Rank #2 (Buy). A big reason for the rank is seven analysts increasing their EPS estimates for the current year. The bullish sentiment has pushed up our Zacks Consensus Estimate from 23 cents to 41 cents.