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Apple Loses Roughly $200 Billion in Market Capitalization After Reports of iPhone Restrictions in China
Apple has lost roughly $200 billion in market capitalization over the last several days as tensions between the U.S. and China rise, and many outlets reported that the company is being singled out by Beijing.
Apple shares fell roughly $3% this past Thursday and have fallen down more than 5% for the week after the reports of the iPhone ban for Chinese state employees were set from Beijing.
The ban, first reported from the Wall Street Journal, cited sources claiming that China is ordering officials in the central government to not use any iPhones whatsoever or other foreign branded devices. The Financial times also cited six unnamed sources that claim they have been told to stop using Apple phones. These individuals come from places including government institutions and state-owned companies.
“Beijing is looking to reduce its dependence on U.S. technology, but this (ban) acts as a significant headwind to Apple as China is its largest international market and accounts for about 20% of its revenues,” said Victoria Scholar, head of investment at interactive investor, a U.K. investment platform.
When asked about the ban at a briefing as of late, Beijing, Chinese Foreign Ministry spokesperson Mao Ning did not comment claiming 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 U.S. and China have been rising and early last month, President Joe Biden signed an executive order to impose blocks and regulations on U.S. high-tech investment in China, reflecting the intensifying competition between the world’s two largest economies.
The reported ban on iPhones comes as Apple gears for its latest product launch next Tuesday September 12th. The company is expected to launch its latest smartphone, the iPhone 15.
A teaser of the livestream for the event, dubbed “Wonderlust,” has been posted on YouTube, revealing no details. Reports are swirling that big changes are in store for the iPhone, including a switch from Apple’s Lightning connector to the USB-C plug that rivals are starting to adopt, partly in response to a European Union mandate.
Apple also faces a threat from Chinese tech giant Huawei, which recently launched its latest flagship smartphone, the Mate 60 Pro.
The iPhone allegedly has enough power to speed and compete with the iPhone and has also been selling units in China. Huawei has not given a lot of press push on the device, but its capabilities have alerted many concerns about China’s ability to circumvent U.S. curbs on Huawei that prevent it from acquiring high tech components like advanced processor chips.