Apple stocks dropped to 5 percent after rumored reports that China banned iPhone for government employees

The rumored restrictions increase concerns that Apple products may become involved in trade disputes between the United States and China, the company's third-largest market

Outlook International Desk

Updated on: 8 September 2023 9:52 am

Apple Event poster

Apple shares fell nearly five percent on Friday, and three percent on Thursday, following a four percent drop on Wednesday, and, following news that Chinese government employees may be prohibited from using iPhones. This is balanced against the possibility of a stock lift from the release of the iPhone 15 on Tuesday.
The rumored restrictions limits, which the Chinese government has not publicly declared, heighten concerns that Apple's products may become embroiled in geopolitical conflicts between the United States and China.
Apple's third-largest market, including Hong Kong and Taiwan, accounts for 18percent of total revenue of $394 billion. It is also the location of the great majority of Apple goods. However, the tech titan refused to comment.
According to The Wall Street Journal, China has ordered central government personnel not to carry iPhones into the office or use them for professional purposes. It was unknown how widespread the restrictions were. Bloomberg News reported on Thursday that the prohibition could be extended to other state-owned enterprises and government-backed organizations.
While a ban on all government employees could reduce iPhone unit sales in China by up to 5percent, Bernstein analyst Toni Sacconaghi wrote in a Thursday note that it would be a bigger threat to Apple if the bans sent a signal that ordinary citizens should instead use Chinese-made electronics.
Last week, numerous Chinese merchants began accepting orders for a new Huawei phone, the Mate 60 Pro, which instantly became a popular subject on Chinese social media.

The upcoming iPhone this year is projected to use a 3nm technology developed by Taiwan Semiconductor Manufacturing Co., while Apple previously used a 7nm process to make its A12 chips, which were used in new iPhones launched in 2018.
Greater China sales grew 8percent year on year to $15.76 billion in Apple's most recent quarter, which ended in June. It was Apple's most rapidly increasing region. During the company's earnings call, CEO Tim Cook stated that users were switching from Android phones to iPhones, adding that this was "at the heart" of the company's results.
"Because of the experience and ecosystem we can provide them, we keep attempting to persuade more and more people to switch," Cook said.
According to John Roque, senior managing director at 22V Research, Apple's average price correction over the last decade has been roughly 35percent. However, Roque claims that the stock's weekly rising momentum peaked in late July and has since dropped, implying a lesser correction.?
?