China banned iPhone

Apple shares fell about 3% on Thursday, following a 4% decline on Wednesday, after several reports suggesting that Chinese government workers could be banned from using iPhones.

The reported restrictions, which have not been publicly announced by the Chinese government, raise concerns that Apple’s products could get caught up in international tensions between the U.S. and China.

Greater China, including Hong Kong and Taiwan, is Apple’s third-largest market, accounting for 18% of total revenue of $394 billion. It’s also where the vast majority of Apple products are assembled. The tech giant declined to comment.

China has ordered officials at central government agencies not to bring iPhones into the office or use them for work, The Wall Street Journal reported on Wednesday. It was unclear how widely the bans were issued. The ban could spread to other state companies and government-backed agencies, Bloomberg News reported on Thursday.

While a ban on all government employees could reduce iPhone unit sales in China by as much as 5%, Bernstein analyst Toni Sacconaghi wrote in a Thursday note, it would be a larger threat to Apple if the bans sent a signal that everyday citizens should instead use electronics made by Chinese companies.

“Perhaps more importantly, restricted use of iPhones among government employees could negatively impact sales among consumers (related family members; general populace) and could be part of a broader move by the Chinese government to promote usage of domestic technology,” Sacconaghi wrote.

Dan Niles, portfolio manager at Satori Fund, said on Thursday he sold his stake in Apple and is now shorting the company, citing the possibility of a government iPhone ban and increased competition from Huawei.

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https://www.cnbc.com/2023/09/07/apple-shares-fall-after-reports-that-china-banned-iphone-use-by-government-employees.html