Apple shares fall after reports of iPhone ban by Chinese government

2023-09-08 07:31:00, Tech CNA

Apple shares fell for a second straight day after reports that Chinese government employees have been banned from using iPhones. The firm's stock market valuation has fallen by more than 6%, or almost $200bn (£160bn), in the past two days.

China is the tech giant's third-largest market, accounting for 18% of its total revenue last year. It is also where most of Apple's products are manufactured by its largest supplier Foxconn. The Wall Street Journal reported Wednesday that Beijing had ordered officials at a central government agency not to bring iPhones into the office or use them for work.

The next day, Bloomberg News reported that the ban could also be imposed on workers at state-owned companies and government-backed agencies. The reports came ahead of the iPhone 15 launch, which is expected to take place on September 12. There has been no official statement from the Chinese government in response to the reports.

Apple has the world's highest stock market valuation, standing at approximately $2.8 trillion. The company did not immediately respond to a BBC request for comment. Shares in some of Apple's suppliers also fell.

Qualcomm, the world's largest supplier of smartphone chips, fell more than 7% on Thursday. Shares in South Korea's SK Hynix were about 4% lower on Friday.

The reports came as tensions between Washington and Beijing remain high. This year, Washington, along with its allies Japan and the Netherlands, restricted China's access to some chip technologies.

China retaliated by restricting exports of two materials key to the semiconductor industry.

Beijing is also reportedly preparing a new $40 billion investment fund to boost its chip-making industry.

Last week, during US Commerce Secretary Gina Raimondo's visit to Beijing, Chinese tech giant Huawei unexpectedly unveiled its Mate 60 Pro smartphone. On Friday, the company launched pre-sales of the Pro+ model of the phone.

Canada-based technology research firm TechInsights said the phone features a new 5G Kirin 9000s processor developed for Huawei by China's largest contract chipmaker SMIC.

TechInsights analyst Dan Hutcheson said this "testifies to the technical progress that China's semiconductor industry has been able to make." This is a "major technological breakthrough for China," investment firm Jefferies said in a research note.

This week, US Congressman Mike Gallagher, who is the chairman of the House Committee on China, called on the Commerce Department to further restrict exports to Huawei and SMIC. / CNA