Coppernicus giant, Apple, suffered a huge blow ahead of China’s ban on the usage of iPhones by government-backed agencies and companies. China accounted for 18% of Apple’s total revenue in 2022 and is the third-largest market of the most valuable public company. According to the Dow Jones Industrial Average, Apple currently has the worst performing stock (fallen by over 6%) after it incurred a $200 billion in the last two days.
The ban inflicted by the worlds’ second largest economy could prove detrimental to Apple since majority of Apple products are manufactured in China. Foxconn Tehcnology Group chairman, Young Liu states that India would the ‘new manufacturing center’ given its robust supplier ecosystem which posseses the ability to develop than China, which took over 30 years to build.
The Wall Street Journal reported that Chinese government officials were prohibited from using iPhones for work. They were also restricted from bringing iPhones to the office. Bloomberg News highlighted that the ban might have been extended to government- backed agencies and state-owned firms.
The Chinese government has refrained from commenting on the reports. Apple’s suppliers were also affected by the ban implemented by China. The stock of Qualcomm, the largest manufacturer of smartphone processors, fell by more than 7% on Thursday, and shares of SK Hynix, a South Korean company, fell by almost 4% on Friday.
The tensions between US and China have worsened in past years on account of Washington’s ban on China to access primary technologies like cutting-edge chip technology. Beijing, consqequently looks forward to reduce dependence on American tech. China exhibits a big tech breakthrough in the semi-conductor segment with the launch of its Mate 60 Pro smartphone (by Huawei). The smartphone has a 5G Kirin 9000s processor, developed for Huawei by China’s largest contract chipmaker SMIC.
The U.S. Commerce Department announced that it was trying to learn more “on the character and composition” of the chip that might be in violation of trade regulations. “The restrictions in place since 2019 have knocked Huawei down and forced it to reinvent itself — at a substantial cost to the (Chinese) government,” the department added. “We will not hesitate to take appropriate action to protect U.S. national security,” the statement reads. “We are continually working to assess and, when appropriate, update our controls based on the dynamic threat environment.”