Apple’s market value has dropped by about $200 billion in the past few days due to escalating tensions between the United States and China. Numerous news outlets have reported that Beijing is specifically targeting Apple.
On Thursday, Apple’s stock price fell by 3%, and it’s down over 5% for the week. This decline comes in response to reports of a ban on iPhones for Chinese government employees, which Beijing has imposed.
The Wall Street Journal was the first to report this ban, citing anonymous sources indicating that China is instructing officials in central government agencies to refrain from using iPhones or other foreign-branded phones. The Financial Times also reported on this, citing six unnamed sources from government institutions and state-owned companies, including a nuclear technology firm and a hospital. These sources revealed that employees have been directed to stop using Apple phones. This ban expands on previous restrictions regarding the use of iPhones for work purposes.
Victoria Scholar, the head of investment at interactive investor, a UK investment platform, commented, “Beijing is aiming to reduce its reliance on U.S. technology, and this ban presents a significant challenge to Apple since China is its largest international market, accounting for approximately 20% of its revenue.”
Apple has not responded to requests for comments on this matter.
When asked about the ban during a daily briefing in Beijing, Chinese Foreign Ministry spokesperson Mao Ning did not directly address it, stating only that “products and services from any country are welcome to enter the Chinese market as long as they comply with Chinese laws and regulations.”
Tensions between the United States and China have been increasing. In the previous month, President Joe Biden signed an executive order imposing restrictions on U.S. high-tech investments in China, reflecting the growing competition between the world’s two largest economies.
White House officials have announced that President Biden, who departed for New Delhi on Thursday evening, will use the annual G20 summit as an opportunity to propose a plan for developing and middle-income countries. This plan would increase the lending capacity of the World Bank and the International Monetary Fund by approximately $200 billion. Biden aims to emphasize that the United States and its like-minded allies are more reliable economic and security partners than China.
The reported iPhone ban comes at an inconvenient time for Apple, as the company is preparing for its latest product launch on September 12, where it is expected to unveil the iPhone 15. A teaser for the livestream event, titled “Wonderlust,” has been posted on YouTube, but it provides no details. There are rumors that significant changes are in store for the iPhone, including a switch from Apple’s Lightning connector to the USB-C plug, which other competitors have already adopted, partly in response to a European Union mandate.
Additionally, Apple faces competition from the Chinese tech giant Huawei, which recently launched its latest flagship smartphone, the Mate 60 Pro. This phone is reported to have the power and speed to rival the iPhone and has been selling well in China. Although Huawei has been discreet about the device, its capabilities have raised concerns that China may have found ways to bypass U.S. restrictions on Huawei, which prevented it from obtaining high-tech components like advanced processor chips, severely impacting its smartphone business.