After reports of a ban on iPhones in China, Apple experienced its largest daily decline
Apple lost $200 billion in two days following reports of a China iPhone ban. On Thursday, reports surfaced that China plans to extend a ban on the use of iPhones to government-backed agencies and businesses. This led to a 2.9% drop in Apple’s stock price.
Financial backers are worrying about the capacity of the world’s most significant public organization to carry on with work on the planet’s second-biggest economy.
On Wednesday, Apple (AAPL) experienced its largest daily decline in more than a month. In two days, the company lost about $200 billion, and its stock is currently the Dow Jones Industrial Average’s worst performer.
Apple could take these bans as a warning.
The company’s products are most popular in China, where they made up about a fifth of the company’s total revenue last year. Although Apple doesn’t list iPhone sales by country, TechInsights analysts think that more iPhones were sold in China last quarter than in the United States. Additionally, the majority of Apple’s iPhones are manufactured in Chinese factories.
KeyBanc Capital analyst Brandon Nispel wrote on Wednesday that Apple, which is based in Cupertino, California, also plays a significant role in the economy of Beijing. The business “has historically been viewed as relatively safe in China from government restrictions” as a result of this. He wrote that these alleged bans raise an important question: Is the government altering its position?
The Wall Street Journal reported on Wednesday that central government officials in China were prohibited from using iPhones and that managers had been informing employees of the restriction through chat groups or meetings.
According to a report published by Bloomberg on Thursday, those prohibitions had been extended to state-backed businesses as well. These businesses include the energy conglomerate PetroChina, which has millions of employees and controls a significant portion of the Chinese economy.
In a note published on Thursday, analysts at Bank of America stated that the release of a new high-end flagship smartphone by Chinese manufacturer Huawei follows the potential iPhone ban. Analysts deemed the timing “interesting.”
On Tuesday, the US government said it was looking into the new smartphone. Public safety Counsel Jake Sullivan said during a White House press instructions that the US needs “more data about definitively its personality and sythesis” to decide whether gatherings skirted American limitations on semiconductor products to make the new chip.
On the news, tech companies went down, the Nasdaq Composite went down by about 0.9 percent on Thursday, and the semiconductor industry went down by more than 2 percent.