A trademark is not effective worldwide but only in registered areas, which can but must not mean worldwide. For the rest, Apple failed to conclusively prove that iPhone was a well known brand in China before 2009 because before that it didn't neither advertise nor sell the iPhone in China. The leather company in return has been using the name since 2007.
While the Apple brand was well known and established, the iPhone brand was not.
The rest is law, this is nothing about common sense.
Nono, they chose this name because it was attached to Apple, the intent is clear. But that doesn't make it illegal. A fact companies like to remind us of all the time.