Apple’s stock has encountered a tumultuous ride over the past two days, shedding a staggering $200 billion in market value. This dramatic decline was driven by reports of stringent Chinese regulations affecting iPhones within government offices and state-owned entities.
The shares of the world’s largest publicly-traded company plummeted for the second consecutive day, marking a 2.8 percent drop to $177.79 during late morning trading. Bloomberg’s report emphasized that Apple’s market capitalization took a hefty hit within this short span.
The initial blow came on Wednesday, with a 3.6 percent share price decrease, following a Wall Street Journal revelation that China had prohibited the use of Apple smartphones in central government agencies. This prohibition was just the beginning, as further unsettling news emerged on Thursday. A report surfaced stating that China was planning to extend this ban to encompass government-affiliated agencies and state-owned enterprises, thereby amplifying the impact of this policy within a centrally-planned economy.
Notably, Apple and Chinese officials have maintained silence regarding these developments, refraining from offering any official comments on the matter to AFP.
This situation unfolds amid escalating tensions between Beijing and Washington, with China seeking to assert its dominance in the tech industry. Huawei, a Chinese tech giant, recently launched a smartphone equipped with a locally-produced processor, which was lauded as a “triumph” in Chinese state media, particularly in light of US sanctions.
Apple, which reported $15.8 billion in revenues from China in its most recent quarter, accounting for nearly 20 percent of its total revenues, appeared to be bucking the trend with an uptick in sales within the Chinese market during a period when overall sales declined.
Analyst Patrick O’Hare of Briefing.com expressed concern about the implications this might have for other tech companies. He noted that if China continues to make business operations difficult for a prominent player like Apple, which has enjoyed a favorable working relationship within the country, it could set a precedent for other US companies conducting business in China.
On the flip side, Wedbush Securities analyst Dan Ives offered a more optimistic perspective. He estimated that even if a Chinese government ban were to materialize, it would only impact a fraction of the projected iPhone sales in the country—less than 500,000 out of an anticipated 45 million units to be sold in the coming year. Ives underscored that Apple has been making significant strides in the Chinese smartphone market, with increasing sales providing the company with an added boost.
