Shares in Apple have experienced a significant decline for the second consecutive day following reports that Chinese government workers are no longer permitted to use iPhones. This development has led to a decrease in the technology giant’s stock market valuation by nearly $200 billion in just two days. China serves as Apple’s third-largest market, constituting 18% of its total revenue last year. Additionally, a majority of Apple’s products are manufactured in China by its primary supplier, Foxconn.
According to the Wall Street Journal, the government in Beijing has instructed central agency officials to refrain from bringing iPhones into the workplace or utilizing them for work purposes. Bloomberg News also reported that this ban might extend to employees of state-owned companies and government-backed agencies. As a result, Apple’s share price has plummeted by approximately 6% during two trading sessions in New York. It is worth noting that these reports emerged ahead of the anticipated launch of the iPhone 15, scheduled for September 12.
There has been no official statement from the Chinese government in response to these reports, and Apple has not yet provided a comment on the situation. However, it is vital to highlight that this development coincides with heightened tensions between Washington and Beijing. The United States and its allies, namely Japan and the Netherlands, have imposed restrictions on China’s access to certain chip technology, prompting China to retaliate by limiting the export of two vital materials for the semiconductor industry.
Moreover, Beijing is reportedly preparing to establish a $40 billion investment fund aimed at bolstering its chip manufacturing sector. During a recent visit by US Commerce Secretary Gina Raimondo to Beijing, Chinese tech giant Huawei unexpectedly unveiled its Mate 60 Pro smartphone, featuring a new 5G Kirin 9000s processor developed by China’s largest contract chipmaker, SMIC. This development has been viewed as a significant achievement for China’s semiconductor industry by the Canada-based technology research firm, TechInsights.
Nevertheless, US congressman Mike Gallagher, the chairman of the House of Representatives committee on China, has called on the Commerce Department to impose further restrictions on exports to Huawei and SMIC. While Apple’s recent decline in sales is notable, it is essential to monitor how the ongoing tensions between the United States and China, particularly in the technology sector, will impact the global market and the future of Apple in China.
