In the wake of escalating tensions between the United States and China, Apple Inc. has witnessed a significant loss of approximately $200 billion in market capitalization over the course of several days. These losses come as multiple media reports suggest that the tech giant is facing increasing scrutiny and restrictions from Beijing.
Apple’s shares experienced a 3% decline on Thursday and have collectively fallen more than 5% over the course of the week. These losses are primarily attributed to reports indicating that the Chinese government is imposing restrictions on the use of iPhones by state employees, with Beijing taking a central role in dictating these actions.
The initial report of the iPhone ban for Chinese state employees was published by the Wall Street Journal, citing undisclosed sources who revealed that China’s central government agencies were instructing officials to refrain from using iPhones or other foreign-branded mobile devices. The Financial Times corroborated these claims, citing six anonymous sources from various government institutions and state-owned enterprises, including a nuclear technology company and a hospital. These sources confirmed that they had been directed to discontinue the use of Apple phones for work purposes, marking an expansion of previous limitations on iPhone usage in professional settings.
Victoria Scholar, Head of Investment at interactive investor, a U.K. investment platform, noted the significance of this development, stating, “Beijing is looking to reduce its dependence on U.S. technology, but this (ban) acts as a significant headwind to Apple as China is its largest international market and accounts for about 20% of its revenues.”
Apple has not yet issued an official statement in response to these reports.
When questioned about the iPhone ban during a daily press briefing in Beijing, Chinese Foreign Ministry spokesperson Mao Ning refrained from commenting directly on the matter. Instead, he stated, “Products and services from any country are welcome to enter the Chinese market as long as they comply with Chinese laws and regulations.”
Tensions between the United States and China have been on the rise, with President Joe Biden recently signing an executive order aimed at imposing restrictions on U.S. high-tech investments in China, reflecting the intensifying competition between the world’s two largest economies.
Against this backdrop, Apple is preparing for its latest product launch scheduled for September 12, during which the company is expected to unveil the iPhone 15. The reported iPhone restrictions in China come at an inopportune moment for the tech giant, potentially impacting its market presence in its largest international market.
Additionally, reports suggest significant changes in the upcoming iPhone, including a shift from Apple’s Lightning connector to the USB-C plug, aligning with the European Union’s requirements. Apple also faces competition from Chinese tech giant Huawei, which recently launched its flagship smartphone, the Mate 60 Pro. Huawei’s product has gained traction in China and raised concerns about China’s ability to bypass U.S. restrictions on Huawei’s access to high-tech components, revitalizing its smartphone business.
Si Venus L Peñaflor ay naging editor-in-chief ng Newsworld, isang lokal na pahayagan ng Laguna. Publisher din siya ng Daystar Gazette at Tutubi News Magazine. Siya ay isa ring pintor at doll face designer ng Ninay Dolls, ang unang Manikang Pilipino. Kasali siya sa DesignCrowd sa rank na #305 sa 640,000 graphic designers sa buong daigdig. Kasama din siya sa unang Local TV Broadcast sa Laguna na Beyond Manila. Aktibong kasapi siya ng San Pablo Jaycees Senate bilang isang JCI Senator.
