In 2020, state-owned Chinese financial publication Economic Observer reported that some government agencies had implemented rules to ban officials from using iPhone due to Apple’s strict privacy rules that make it difficult for anti-corruption officials to access and investigate suspects’ phones.
Apple’s shares slipped on Wednesday and Thursday after the Wall Street Journal first reported the move, amid fears of tit-for-tat action as Sino-US tension rise.
Bloomberg on Thursday reported that China planned to broaden the ban to state firms and agencies, citing sources.
STRONG SALES
Citi analysts noted that the news had also weighed on the shares of Apple suppliers and said the market may have “have overreacted to the news flow amidst weak confidence overall”, citing how shares in suppliers of US automaker Tesla tumbled but quickly recovered after reports of China restricting its cars from entering military complexes in 2021.
China is one of Apple’s biggest markets and generates nearly a fifth of its revenue. Apple together with its suppliers employs thousands of workers in China and CEO Tim Cook stressed its long ties with the country during a March visit to Beijing.
Apple has been enjoying strong sales in China, ranking in third place in overall smartphone shipments in the second quarter according to consultancy Canalys, partly thanks to the hit to Huawei’s mobile business from US sanctions, which has left it the main premium smartphone maker in China.
China has increasingly emphasised using locally-made tech products, as technology has become a major national security issue for Beijing and Washington.
Government agencies and state-owned enterprises (SOEs) in both countries have been the first and most important areas to push forward such a campaign.
A major part of the campaign centred on requiring government departments and SOEs to replace foreign-made products in their IT systems with domestic alternatives.
The replacement effort accelerated this year in China after an order was issued to SOEs by the state asset regulator, which required they complete the replacement tasks by 2027 in critical IT infrastructure such as office software platforms.
Chinese rivals to Apple include Xiaomi, Oppo and Vivo.
Huawei last week unveiled its latest Mate 60 Pro smartphone that teardown firms say contains a domestically developed advanced chip and could bring it back to rivalling Apple.
Source: CNA
