Apple shares plummet as China bans iPhones in government offices
China has prohibited central government officials from using or bringing iPhones and other devices from foreign brands, into the office, as per a Wall Street Journal report. This has caused Apple's shares to plummet by 3.6% to $182.91, the highest one-day drop since August 4. China is one of Apple's largest markets, generating roughly a fifth of its revenue. This ban could heighten concerns among foreign firms operating in China as Sino-US tensions escalate.
China's push for domestic tech independence
For over 10 years, China has aimed to decrease its dependence on foreign technologies by urging state-affiliated institutions, such as banks, to switch to native software and promote local semiconductor chip manufacturing. To recall, Huawei recently released a 5G smartphone with an advanced silicon chip, showcasing the Chinese government's progress in building a domestic chip ecosystem despite US-led export restrictions.
Beijing's stance affects US companies
Several analysts have stated that the reported ban demonstrates Beijing's unwillingness to spare any US firm in its push to reduce reliance on American technologies. Even Apple, which employs hundreds of thousands of people in the country, has to face severe restrictions. Companies are advised to diversify supply chains to other countries and ensure their customer concentrations are less China-dependent in case the situation gets worse.
US has also banned Huawei and TikTok
China-US tensions have been high as the latter has blocked China's access to equipment critical for its competitive chip industry. Meanwhile, Beijing has restricted shipments from top US firms including Micron Technology and Boeing. China's latest restriction mirrors similar bans in the US against short video platform TikTok owned by ByteDance, and homegrown tech giant Huawei.
