Yoodley is reader-supported. When you buy through links on our site, we may earn an affiliate commission.
China’s iPhone clampdown on government officials is expected to soon reach other government agencies and organizations, translating to a more severe effect for Apple. It already showed its initial impact, with Apple stock price dropping to 3.6% and 3.29% on Wednesday and Thursday, respectively. According to an analyst forecast, this ban and Apple’s battle against Huawei in the Chinese market could lead to the loss of up to 20 million iPhone unit sales.
The ban is part of China’s initiative to limit the outlet of sensitive data flow to foreign countries and its reliance on American technology. This has pushed the country to start the ban on government officials, with recent reports saying it would also cover other individuals and groups linked to the government. According to Bloomberg, the ban will soon include “state-owned enterprises and other government-controlled organizations.”
And while the complete details of the crackdown application are still under development, the report says the ban will vary by group, “with some forbidding Apple devices from the workplace while others could bar employees from using them entirely.”
Yet, while Bloomberg reports that “there’s been no formal or written injunction as yet” regarding the implementation of the ban, a separate report by The Wall Street Journal claims that government agencies have already informed employees that they can no longer use iPhones for work or even bring them in workplace premises. While this already sounds bad news for Apple, Bloomberg implies that more drastic measures should be expected soon.
In relation to that, and given that China is a huge iPhone market, the ban spells trouble for Apple. According to rumors, the iPhone 15 would not launch in China. China Mobile, a wireless carrier in the country, denied this. Bloomberg also dismisses the claim in its report, explaining that China has no reason to make the ban permanent as Apple provides employment to Chinese citizens, which affects the country’s economy.
Nonetheless, analysts claimed that Apple could lose up to 20 million iPhone sales. To start, analysts at Bank of America said that China banning the use of iPhones for the work of its employees could mean the loss of 5 to 10 million iPhone sales. In case the broader ban is implemented, including the restriction of bringing iPhones within office premises, the number could be higher than anticipated.
On the other hand, analysts at Oppenheimer said that Apple could also fail to sell another 10 million units due to its competition against Chinese company Huawei. The brand is one of the dominant brands in the country, and the ban could further give it an edge in the smartphone market competition. The clampdown could also push Chinese customers to embrace the plethora of Chinese smartphone brands, translating to a bigger challenge for Apple.