Apple Inc. is facing a tumultuous period in the stock market as shares dipped for the second consecutive day following reports that China bans iPhone for government employees.
The repercussions were swift, with the company’s stock market valuation plummeting by over 6%, equating to nearly $200 billion (£160 billion), within just two days.
The significance of these reports is underscored by China being Apple’s third-largest market, contributing 18% of its total revenue last year.
Furthermore, China is where the majority of Apple’s products are manufactured, with Foxconn being its largest supplier.
The chain of events began with a report from The Wall Street Journal on Wednesday, stating that Beijing had issued a directive to central government agency officials, forbidding the use of iPhones within offices or for work-related purposes.
Bloomberg News, the following day, added fuel to the fire, suggesting that this ban could extend to workers in state-owned companies and government-backed agencies.
This controversy comes on the heels of the imminent launch of the iPhone 15, scheduled for September 12. Thus far, there has been no official statement from the Chinese government regarding these reports.
Apple, a global tech juggernaut, boasts the highest stock market valuation in the world, approaching $2.8 trillion. Despite the gravity of this situation, the company has yet to comment in response to the BBC’s request.
In addition to the adverse effects on Apple, shares of some of its suppliers also tumbled. Qualcomm, the world’s largest supplier of smartphone chips, experienced a decline of more than 7% on Thursday.
South Korea’s SK Hynix also witnessed around a 4% reduction in its shares on Friday.
These developments transpire amid heightened tensions between Washington and Beijing, with both sides taking measures that reverberate throughout the tech industry.
This year, Washington, in collaboration with its allies Japan and the Netherlands, has placed restrictions on China’s access to crucial chip technology.
In response, China has imposed export restrictions on two materials pivotal to the semiconductor sector.
Additionally, reports suggest that Beijing is preparing a formidable $40 billion investment fund to fortify its domestic chip manufacturing industry, highlighting China’s unwavering commitment to technological autonomy.
Last week, during the visit of US Commerce Secretary Gina Raimondo to Beijing, Chinese tech giant Huawei surprised the world by unveiling the Mate 60 Pro smartphone. On Friday, the company initiated pre-sales for the Pro+ variant of the phone.
Notably, Canada-based technology research firm TechInsights reported that the phone incorporates a groundbreaking 5G Kirin 9000s processor, developed for Huawei by China’s largest contract chipmaker, SMIC.
Analyst Dan Hutcheson from TechInsights asserted that this development “demonstrates the technical progress China’s semiconductor industry has been able to make,” adding that it marks a “big tech breakthrough for China,” according to investment firm Jefferies.
This week, US Congressman Mike Gallagher, who chairs the House of Representatives committee on China, called upon the Commerce Department to further tighten export restrictions on Huawei and SMIC, intensifying the tech skirmish between the two global powers.
(Source: BBC)
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