- Apple Stock Declines Amid Reports of Chinese Government iPhone Ban
- China’s Significance to Apple’s Market and Supply Chain
- Growing Technology-Related Tensions Between the US and China
Apple’s stock has declined for the second consecutive day following reports that Chinese government employees have been prohibited from using iPhones.
In the past two days, the company’s stock market valuation has decreased by more than 6%, or nearly $200bn (£160bn).
China is the third-largest market for the technology colossus, accounting for 18% of its total revenue last year.
It is also where Apple’s largest supplier, Foxconn, manufactures the majority of its products.
The Wall Street Journal (WSJ) reported on Wednesday that Beijing had ordered central government agency officials to not bring iPhones into the office or use them for work.
The next day, Bloomberg News reported that the prohibition could also be imposed on employees of state-owned companies and government-backed organizations.
In recent weeks, officials were instructed by their superiors not to use iPhones, sources told the WSJ. Additionally, restrictions were imposed on other foreign-made devices.
Sources tell the publication that some agencies have banned iPhones, but the prohibition has been increased.
It is unclear to what extent these instructions were disseminated throughout the Chinese bureaucracy.
The allegations surfaced in advance of the expected September 12 release of the iPhone 15 model.
On Chinese social media, some individuals claiming to work for state-owned enterprises reported being instructed to cease using Apple products by the end of September. One quipped that they were impoverished and unable to purchase a new phone: “What should I use for work?”
Apple manufactures iPhones in China, one of its main markets, but it has recently increased production in India.
The Chinese government has not issued an official statement in response to the allegations.
Contagious consequence
Apple has the highest stock market valuation in the globe, at approximately $2.8 trillion.
In addition to the decline in Apple shares, a number of its suppliers also experienced a decline.
On Thursday, shares of Qualcomm, the world’s largest supplier of smartphone processors, fell by more than 7 percent, while shares of South Korea’s SK Hynix fell by roughly 4 percent on Friday.
Technology-related tensions between the United States and China have been steadily increasing, with both sides imposing restrictions.
This year, the United States, together with its allies Japan and the Netherlands, restricted China’s access to certain semiconductor technologies.
China retaliated by limiting exports of two crucial semiconductor industry materials.
According to reports, Beijing is also preparing a new $40 billion investment fund to bolster its chip manufacturing industry.
Huawei unexpectedly introduced the Mate 60 Pro smartphone in Beijing last week during US Commerce Secretary Gina Raimondo’s visit.
On Friday, the company began selling the Pro+ version of the phone in advance.
TechInsights, a Canadian technology research firm, reported that the phone contained a new 5G Kirin 9000s processor developed by China’s largest contract semiconductor manufacturer SMIC for Huawei.
Analyst Dan Hutcheson of TechInsights stated that it “demonstrates the technical progress China’s semiconductor industry has made”
This is a “major technological breakthrough for China,” according to a research note by the investment firm Jefferies.
This week, US congressman Mike Gallagher, who is the chairman of the House of Representatives committee on China, called on the Commerce Department to further restrict exports to Huawei and SMIC.
Security patch
Meanwhile, Apple released an emergency software update for a large number of ancient and current devices on Thursday, following the discovery of a security flaw exploited by unknown hackers.
After digital rights investigators at Citizen Lab discovered assailants hacking Apple devices of specific targets using a novel and unprecedented technique, the update was released.
Apple discovered a similar so-called “exploit” and issued both updates as part of a rapid customer security response.
This is the fifteenth time this year that Apple has been compelled to release comprehensive security enhancements.
