Apple’s stock valuation falls as China takes action against iPhone use by government officials.
Apple’s stock has experienced a significant decline in the wake of reports suggesting that Chinese government employees may be prohibited from using iPhones. Over the past two days, the tech giant’s market valuation has plummeted by more than 6%, representing nearly $200 billion in losses.
China stands as one of Apple’s most crucial markets, contributing 18% of its total revenue last year. Additionally, it is where the majority of Apple’s products are manufactured, primarily by its major supplier, Foxconn.
The Wall Street Journal (WSJ) initially reported that Beijing had issued orders to central government officials, instructing them not to bring iPhones into the workplace or use them for professional purposes. Bloomberg News later speculated that this ban could extend to workers in state-owned companies and government-backed agencies.
These directives were conveyed to officials by their superiors in recent weeks, according to sources cited by WSJ. Restrictions on other foreign-branded devices were also mentioned. While iPhones were already banned in some agencies, it appears that the scope of this prohibition has been expanded. The extent to which these instructions have been disseminated throughout the Chinese bureaucracy remains unclear.
These reports have emerged just ahead of the anticipated launch of the iPhone 15, scheduled for September 12th. On Chinese social media, some individuals claiming to work for state-owned companies have reported being instructed to cease using Apple devices by the end of September. Some even expressed concerns about affordability, pondering what devices they should use for work.
Despite these developments, there has been no official statement from the Chinese government regarding these reports, and Apple has yet to respond to requests for comment.
The repercussions of this situation have extended beyond Apple itself. Shares in several of its suppliers have also experienced declines. Qualcomm, the world’s largest supplier of smartphone chips, saw its stock drop by over 7%, while South Korea’s SK Hynix experienced a 4% decline.
Tensions surrounding technology between the United States and China have been steadily escalating, leading to various restrictions on both sides. This year, the U.S., along with Japan and the Netherlands, imposed restrictions on China’s access to certain chip technology. In retaliation, China restricted exports of key materials vital to the semiconductor industry. Reports also suggest that China is preparing a substantial $40 billion investment fund to boost its domestic chip manufacturing industry.
On a related note, Chinese tech giant Huawei unexpectedly unveiled its Mate 60 Pro smartphone, which is seen as a significant step for China’s semiconductor industry. The phone features a new 5G Kirin 9000s processor, developed by China’s largest contract chipmaker, SMIC.
Meanwhile, Apple released an emergency software update for a wide range of old and current devices due to a security vulnerability exploited by unknown hackers. This marks the 15th time this year that Apple has issued substantial security updates.
As these developments continue to unfold, Apple faces challenges in maintaining its presence in the Chinese market and navigating the complex landscape of international technology tensions.
