Title: Potential Chinese Government Ban on iPhones Sends Apple Shares Tumbling
Apple Inc. experienced a significant blow to its shares this week as reports of a potential ban on Chinese government workers using iPhones emerged. With a decline of approximately 3% on Thursday and 4% on Wednesday, concerns have escalated regarding the impact of escalating tensions between the US and China on Apple’s products.
China, including Hong Kong and Taiwan, represents Apple’s third-largest market, accounting for 18% of its total revenue. The possible ban, which has not been officially announced by the Chinese government, has raised concerns that Apple could become entangled in the crossfire between the two nations.
Reports indicate that China has ordered officials at central government agencies to refrain from bringing iPhones into the office or using them for work. Analysts fear that this ban could extend to other state companies and government-backed agencies, potentially undermining iPhone sales in the country by up to 5% and encouraging citizens to opt for Chinese-made electronic devices instead.
These concerns were further exacerbated by investment portfolio manager Dan Niles, who recently sold his stake in Apple and began shorting the company. Niles cited the possibility of a government iPhone ban and heightened competition from domestic tech giant Huawei as reasons for his decision.
Huawei, which faced US sanctions in 2019 and was placed on the entity list, has now started accepting orders for its latest flagship phone, the Huawei Mate 60 Pro, in China. Priced at 6,900 RMB (approximately $954), the phone utilizes a Chinese-manufactured chip from Huawei’s chip subsidiary. The 7-nanometer production process of Huawei’s chip presents concerns about the effectiveness of separate restrictions on chip-manufacturing technology.
Despite the uncertainties and challenges, Apple’s most recent quarter in Greater China witnessed an 8% increase in sales compared to the previous year, reaching a total of $15.76 billion. This highlights Greater China as Apple’s fastest-growing region, albeit amidst the evolving landscape of geopolitical tensions and emerging domestic competitors.
As the situation unfolds, Apple will need to navigate these challenges while keeping a watchful eye on developments in China’s tech market and government policies.
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