Sept. 7 (UPI) — Apple’s stock dropped Thursday by 3% on reports that Chinese government workers may be banned from using iPhones. It follows a 4% loss in share prices Wednesday on track to wiping out $200 billion of market value.
At the close of the markets on Thursday, Apple stock was trading at $177.55, down 2.92%, marking the second day in a row in which its value has fallen. It was trading slightly higher in after-hours trading late Thursday, at $178.10.
Thursday’s initial price drop came after The Wall Street Journal reported Wednesday that the Chinese government had ordered government agencies not to use iPhones and other foreign-made devices at work.
Bloomberg followed with the report that China plans to expand the iPhone ban to state companies as well as government agencies.
China, Hong Kong and Taiwan together comprise 18% of Apple’s 2022 revenue of $394 billion and Apple makes a big majority of its products in China.
During a visit to China in March Apple CEO Tim Cook spoke of the “symbiotic” relationship the company has with China, but that may be changing given still-rising U.S.-China tensions.
Bernstein analyst Toni Sacconaghi wrote Thursday that an iPhone ban on all Chinese government employees could cut Apple’s phone sales in China by as much as 5%.
“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.
Increased Chinese competition from Huawei in the China phone market is also pressuring Apple.
U.S. sanctions dramatically cut Huawei’s sales in most markets in 2021, but the company just released a new Mate 60 Pro phone to offer new competition to Apple in China.
According to Wall Street tech analyst Dan Ives, the true impact of the Chinese government ban on iPhones is “overblown.”
“On the recent China news over the last few days we believe in a worst case scenario any China government agency iPhone ban is way overblown as to quantify its less than ~500k iPhones of roughly 45 million we expect to be sold in China over the next year,” Ives wrote on X. ” iPhone 15 on deck.”