Apple Shares Decline Amid Reports of Chinese Government iPhone Ban
Apple Faces Stock Market Setback as China Restricts iPhone Use Among Government Workers
Apple Shares stock has experienced a consecutive two-day decline following reports that Chinese government employees have been prohibited from using iPhones. The tech giant’s market valuation has contracted by over 6%, nearly $200 billion, over this brief period.
China represents Apple’s third-largest market, contributing to 18% of its total revenue last year. Additionally, most of Apple’s products are manufactured by its principal supplier, Foxconn, in China.
The Wall Street Journal (WSJ) disclosed on Wednesday that the Chinese government had issued instructions to central government agency officials, directing them not to use iPhones for work purposes. Furthermore, Bloomberg News suggested that this ban might extend to employees of state-owned enterprises and government-affiliated agencies.
According to sources, these directives have been disseminated to officials by their superiors in recent weeks. Similar restrictions have been placed on other foreign-branded devices. While iPhones were previously prohibited in some agencies, it appears that this ban has been expanded, although the extent of its implementation remains unclear.
Reports of these restrictions emerged just ahead of the anticipated launch of the iPhone 15, scheduled for September 12.
On Chinese social media, individuals claiming to work for state-owned companies shared their experiences of being instructed to cease using Apple devices by the end of September. Some even humorously pondered what alternative devices they could afford for work purposes.
China stands as one of Apple’s most significant markets, and the majority of iPhones are produced in the country, although Apple has recently increased its production in India. To date, there has been no official response from the Chinese government regarding these reports, and Apple has yet to comment on the matter.
This development has had a ripple effect on Apple’s suppliers. Qualcomm, the world’s leading supplier of smartphone chips, witnessed a more than 7% drop in its shares on Thursday, while South Korea’s SK Hynix saw a roughly 4% decline on Friday.
Tensions between the United States and China regarding technology have escalated, with both nations imposing various restrictions. This year, the U.S. and its allies, Japan and the Netherlands, curtailed China’s access to certain chip technologies. In response, China restricted the export of two materials essential to the semiconductor industry.
Additionally, Beijing is reportedly preparing a $40 billion investment fund aimed at bolstering its domestic chip-making industry. Last week, during a visit by U.S. Commerce Secretary Gina Raimondo to Beijing, Chinese tech giant Huawei unexpectedly unveiled its Mate 60 Pro smartphone. TechInsights, a Canada-based technology research firm, revealed that the phone featured a new 5G Kirin 9000s processor developed for Huawei by China’s largest contract chipmaker, SMIC. Experts view this as a significant advancement for China’s semiconductor industry.
Meanwhile, on Thursday, Apple issued an emergency software update for numerous old and current devices after the discovery of a security vulnerability exploited by unknown hackers. The update followed findings by digital rights investigators at Citizen Lab, who identified attackers targeting Apple devices using a novel technique. This marks the 15th security update issued by Apple this year.
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