Following reports that China, a significant market for Apple, had banned government personnel from using iPhones amid its ongoing tech dispute with the US, Apple’s stock took a hit in after-hours trading on Thursday. This decline followed the company’s largest single-day loss in a month, as reported by Forbes.
During after-hours trading, Apple shares saw a 2.62% drop at 5:01 a.m., according to the report. This came after a 3.6% decrease in New York on Wednesday, noted as Apple’s most substantial single-day share price decline in over a month, according to Bloomberg. This downturn was notable, given the general upward trend in the tech sector, which saw a 46% increase in Apple’s business this year.
These developments were sparked by reports on Wednesday that China had prohibited central government employees from using or bringing iPhones into government offices. Additionally, Huawei’s launch of a new smartphone this week posed a potential threat to Apple’s dominant market share.
Currently, Apple enjoys a significant presence in China, but it faces criticism on multiple fronts. The emergence of a competitive product from Huawei and the rumored iPhone ban in government buildings could negatively impact sales in a crucial market that contributed to the company’s $74 billion in revenue the previous year.
Beyond sales, Apple’s reliance on Chinese manufacturing, where most major devices are produced, puts it at risk. The potential strain on its global supply chain due to Beijing’s actions signals further challenges.
The extent to which Beijing will enforce the iPhone ban remains unclear. The Wall Street Journal initially reported the prohibition, but its scope and reach are not well-defined. Bloomberg, while confirming the news, suggested that it would affect “a plethora of state-owned enterprises and other government-controlled organizations.” This expansive designation could encompass a wide range of institutions given Beijing’s pervasive influence.
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