In a consecutive two-day decline, Apple shares have suffered significant losses following reports of a Chinese government ban on iPhones among government workers. This sharp downturn has caused the tech giant’s stock market valuation to plummet by over 6%, amounting to nearly $200 billion in losses.
China, Apple’s third-largest market, holds substantial significance, contributing 18% to its total revenue last year. Furthermore, China serves as the primary manufacturing hub for Apple’s products through its key supplier, Foxconn.
The Wall Street Journal initially reported that Beijing issued directives instructing central government agency officials not to use iPhones for work or bring them into the office. Bloomberg News later revealed that the ban might extend to employees at state-owned companies and government-backed agencies.
While the ban on iPhones in certain agencies already existed, it appears to have been broadened recently. The extent to which these instructions have been disseminated throughout Chinese officialdom remains unclear.
These reports emerged just ahead of the highly anticipated launch of the iPhone 15 scheduled for September 12th.
On Chinese social media, some individuals claimed to work for state-owned companies and reported being instructed to cease using Apple devices by the end of September. Amid these directives, questions arose about affordability for some individuals who humorously pondered, “What should I use for work?”
Although China ranks among Apple’s most significant markets and houses its manufacturing, including recent expansion in India, no official statement has been issued by the Chinese government in response to these reports.
Apple has yet to provide a formal comment on the matter.
The repercussions extended beyond Apple, impacting its suppliers. Qualcomm, the world’s leading supplier of smartphone chips, witnessed a more than 7% decline in its shares, while South Korea’s SK Hynix faced a roughly 4% drop.
Tensions regarding technology between the US and China have steadily escalated, resulting in both parties imposing restrictions. This year, the US and its allies imposed limitations on China’s access to vital chip technology. In retaliation, China curbed the export of materials essential to the semiconductor industry. Additionally, Beijing is reportedly establishing a $40 billion investment fund to bolster its chip manufacturing sector.
Amidst this backdrop, Huawei, a prominent Chinese tech giant, unveiled its Mate 60 Pro smartphone during US Commerce Secretary Gina Raimondo’s visit to Beijing. This launch demonstrated China’s progress in its semiconductor industry, signifying a significant technological advancement.
The situation further escalated as US Congressman Mike Gallagher called on the Commerce Department to impose additional export restrictions on Huawei and China’s leading contract chipmaker, SMIC.
In the midst of these developments, Apple responded to an emergent security vulnerability by releasing an immediate software update for a vast range of old and current devices. This decision came after digital rights investigators at Citizen Lab uncovered attackers employing a novel and unprecedented technique to compromise specific targets using Apple devices.
Apple discovered a similar exploit and swiftly issued both updates as part of an extensive security response—a recurring pattern as this marks the 15th time this year that Apple has implemented sweeping security updates.