Apple shares plunge after China reportedly banned iPhone use by government officials | apple
Apple shares fell after China reportedly banned officials at central government agencies from using or bringing iPhones and other foreign-branded devices into the office.
The Wall Street Journal reported that Chinese officials have received the instructions in recent weeks from their superiors in chat groups or workplace meetings, adding that it was not clear how widespread the orders were.
The report had a strong impact on stock indices on Wall Street, where Apple shares fell by 3.6%. China is one of Apple’s largest markets and generates nearly a fifth of its revenue.
Several analysts said on Wednesday that the reported move shows that Beijing is not willing to spare any American companies in its quest to reduce its reliance on American technologies.
“Even Apple is not immune … in China, where it employs hundreds of thousands, if not more than a million workers, to assemble its products through its relationship with Foxconn,” said Tom Forte, an analyst at DA Davidson.
This “should inspire companies to diversify their supply chain and customer concentrations to be less dependent on China in the event of tensions exacerbating.”
The ban could raise concerns among foreign companies operating in China as Sino-US tensions escalate, and it comes ahead of an Apple event next week that analysts believe will be about the launch of a new line of iPhones.
The Wall Street Journal report did not mention other phone makers besides Apple. Apple and China’s State Council Information Office, which handles media inquiries on behalf of the Chinese government, did not immediately respond to Reuters’ requests for comment.
The latest restriction by China mirrors similar bans taken in the United States against Chinese smartphone company Huawei Technologies and short video platform TikTok, owned by Chinese company ByteDance.
For more than a decade, China has sought to reduce reliance on foreign technologies, requiring state-affiliated companies such as banks to switch to domestic software and boost domestic semiconductor chip manufacturing.
Analysts said that Huawei recently launched a 5G smartphone that uses an advanced silicon chip on a small scale that was thought to be beyond its capabilities due to US-led export restrictions.
Analysis firm TechInsights said the Mate 60 is the first processor to use SMIC’s most advanced 7nm technology, and indicates that the Chinese government is making some progress in its attempts to build a homegrown ecosystem of chips.
Tensions have risen between China and the United States as Washington works with its allies to block China’s access to vital equipment needed to keep the chip industry competitive, and Beijing restricts shipments from prominent US firms including aircraft maker Boeing and chip maker Micron Technology.
There’s no immediate impact on Apple’s earnings, said Angelo Zino, a CFRA Research analyst, given the iPhone’s popularity in China.
During a visit to China last week, US Commerce Secretary Gina Raimundo said US companies had complained to her that China had become “uninvestable,” citing fines, raids and other measures that made it risky to do business in the world’s second-largest country. Economy.