Apple experienced a significant loss of $200 billion in market value within just two days due to reports of restrictions on iPhones in China.
- Reports emerged that China has imposed restrictions on the use of Apple smartphones in government offices, state-backed entities, and government-backed agencies. The move is seen as an escalation of tensions between China and the United States.
- Apple’s shares fell sharply for a second consecutive session, with a 2.8% drop to $177.79 per share in late morning trading. The decline followed a 3.6% fall the previous day after a Wall Street Journal report on the initial restrictions.
- Analysts express concerns that if China makes business difficult for Apple, it could set a precedent for other U.S. companies operating in China.
- Apple reported revenues of $15.8 billion from China in the most recent quarter, accounting for nearly 20% of its total revenues. The restrictions could have implications for future sales and Apple’s overall performance in the Chinese market.
- Market resilience: Despite the restrictions, some analysts believe that Apple has gained significant market share in China’s smartphone market and that the impact on the company’s sales might be limited.
- Rising competition: The release of a Huawei smartphone featuring a locally-made processor has been celebrated in Chinese state media, highlighting China’s efforts to promote its domestic tech industry and reduce reliance on foreign companies like Apple.