China-United States tensions: the iPhone victim of Beijing’s revenge?

2023-09-08 11:10:20

The tension between Beijing and Washington is rising again. According to daily information The Wall Street Journal, published Wednesday, September 6, China would have banned the use and possession of iPhones for its officials. A barely veiled mimicry of Washington, as a response to the partial bans which affected the Chinese Huawei a few years ago in the United States – particularly for large companies -, and more recently the mobile application of Chinese origin TikTok, banned in Parliament for reasons of national security. According to the American newspaper, Chinese administration employees were notified of this ban by group messages or during meetings. It comes just a week before the announcement of the release of the new iPhone 15 in the country.

Six months ago during the China Development Forum, Apple boss Tim Cook was still praising the Apple brand’s “symbiotic relationship” with the Middle Country. “Apple and China have grown together,” he said, as almost all iPhones, MacBooks and other iPads are made there. But these very special links no longer seem to escape the geopolitical and commercial tensions between the United States and the Chinese administration.

A recent Bloomberg article recently highlighted that as diplomatic and trade relations become strained between the United States and China, the American giant must increasingly turn to other production sites. “iPhone components are now produced in different countries, then assembled in other locations before being shipped to customers around the world,” writes Bloomberg.

The Wall Street Journal, however, recalls that Chinese authorities have been restricting the use of iPhones by certain officials for years, but that this ban has been extended to more people, without being able to specify exactly how many. Without knowing either the official motivations of this enlargement…

Apple’s revenue hampered?

Following these announcements, the securities of Apple, the world’s largest market capitalization, fell by almost 3% on Thursday. Over two days, the title of the Apple firm fell by more than 6%, returning to its level of August 25 and causing its market capitalization to melt from more than 200 billion dollars to 2,776 billion dollars.

“Apple’s growth depends a lot on China and if Beijing’s repression intensifies, this could pose a big problem for a series of technology companies which also depend on China,” said Agence France. Press Edward Moya, analyst for Oanda. Investors fear Chinese restrictions could hamper Apple’s revenue prospects.

However, for analyst Dan Ives of Wedbush, the presence of iPhone in Chinese administrations represents only a small share of Apple’s market in China. “At worst”, this would concern “500,000 devices out of the approximately 45 million which will be sold in China over the next twelve months”, assures the analyst. These Chinese measures come as Beijing has already asked its central administration, in 2022, to change its foreign brand IT equipment for computers “made in China”, according to press information.

For its part, the Biden administration implemented new export controls late last year aimed at limiting Beijing’s ability to buy and manufacture high-end chips used in military applications. . On Thursday, neither Apple nor the White House immediately commented on the decision of the Chinese authorities.