Apple's China headache could worsen with the Xi Jinping administration expanding the iPhone ban further to include several other state-run and state-controlled agencies.
What Happened: The Xi Jinping administration is planning to broaden the scope of its iPhone ban from just government employees to those working in other state-run agencies and other government-controlled organizations, reported Bloomberg.
See Also: iPhone 15 May Face Hurdle In China As Government Officials Receive Foreign Device Ban, Says Report
The broadening scope of the iPhone ban comes two days after Chinese officials were ordered to stop bringing iPhones and other foreign-branded phones to work. This spooked the markets, too, with Apple Inc. AAPL shares ending Thursday 2.9% in the red. Apple's shares are down 6.2% this week alone.
Earlier on Wednesday, a report stated that the Chinese government had banned its officials from using Apple's iPhones and other foreign-made devices at work.
Another report from Nikkei Asia said that the China iPhone ban has been expanded to employees of local governments, prefectures, cities, and state-owned enterprises.
As of 2021, China had over 56 million central and local government employees.
Why It Matters: The broadening of China's iPhone ban comes days before the highly-anticipated launch of the iPhone 15 series at the September 12 Wonderlust event.
It also coincides with the re-emergence of tech giant Huawei, which launched a new smartphone, Mate 60 Pro. It is said to be powered by a 7-nanometer chipset, which seemed infeasible given the US’ aggressive sanctions.
Apple also dominates the high-end market in China's smartphone industry – it was the third-largest smartphone maker in China at the end of the June 2023 quarter, with a market share of 16%, according to Counterpoint Research.
Overall, the Chinese market contributes 19% to Apple's topline. However, Wedbush Securities’ analyst Dan Ives thinks the concerns are overblown.
"I think this bark is worse than the bite. The Chinese consumer continues to want iPhones, and we believe there are 80-90 million of those in an upgrade opportunity," he said in a CNBC interview.
Image – Shutterstock
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