Just a few months ago, Tim Cook was one of the few American CEOs brave enough to venture into China after it reopened. In March, Apple’s chief executive attended a high-profile government-organized conference, met with Chinese leaders, and proudly proclaim Apple and China have a “symbiotic relationship.”
That relationship is now being tested with reports that Beijing is preventing some government employees from using Apple smartphones because of China’s tough stance on any official use of foreign technology.
Beijing orders some government officials to stop using iPhones wall street journal reported on Wednesday. Beijing is also considering extending the ban to the entire government and state-owned enterprises, Bloomberg reported Thursday.
The news hit Apple’s stock hard. In the past two days, the company’s shares have fallen nearly 7%, wiping $200 billion off its market value. (Apple remains by far the most valuable company in the world at $2.7 trillion, compared with second-place Microsoft at $2.4 trillion.)
Apple did not immediately respond to a request for comment.
If Beijing does restrict iPhone use, it would be a potential blow to Apple’s close ties with China. However, the relationship has been somewhat shaky following supply chain disruptions and is now under pressure from rival Huawei Technologies to return.
How important is China to Apple?
China is key to Apple’s supply chain and its sales.
Apple relies on Chinese suppliers for many of its electronics, including iPhones, iPads, AirPods and the upcoming Vision Pro headphones. About half of Apple’s smartphones are produced at a giant factory complex in Zhengzhou nicknamed the ” “iPhone Town”run by electronics manufacturer Foxconn.
China is also a major consumer market for Apple, its largest outside the United States. $15.8 billion Sales from China alone accounted for a little more than 19% of its total sales in the last quarter. Chinese consumers are also flocking to iPhones: Apple has a 65% share of the market for high-end phones priced above $600. wall street journal Citing data from research firm IDC. (Apple ranked fourth overall, behind cheaper domestic brands Oppo, Vivo and Honor, according to the survey.) South China Morning Post.)
apple also meet Comply with Chinese regulations on censorship and data security, including storing personal data of Chinese customers in domestic data centers.
But recent events may prompt Apple to reconsider its reliance on China. In November, zero COVID-19 lockdowns, particularly in Zhengzhou, prompted the company to warn that production of the latest iPhone models at the time would be lower than expected heading into the U.S. holiday season.
A slowing Chinese economy could also weigh on smartphone sales, although Apple has so far managed to weather the fall in consumer confidence. According to the data, Apple is the only smartphone manufacturer among the top five in China that achieved sales growth in the last quarter. CNBC.
Apple is investing in manufacturing elsewhere in Asia to diversify its supply chain.company earn 7% now its iPhone sales in India, It is said Production of the next-generation iPhone begins in the South Asian country.Apple is also shifting some production ipad, MacBook and AirPods headed to Vietnam.
The company also wants India to be the next big market for its electronics. Cook called the country “a very exciting market for us” in a conference call with analysts in February, where Apple opened its first retail store earlier this year.
espionage concerns
China It is said A plan was drawn up in 2019 to withdraw all foreign technology from government operations within three years. The decision was partly due to U.S. sanctions on Huawei, which bar it from buying advanced chips. The Chinese company was forced to stop making its high-end phones, exposing the influence of the United States on China’s technology industry.
Last year, China ordered government agencies to stop using Foreign-made PCs and software, shifting them from Western companies like HP and Microsoft to domestic alternatives like Lenovo and Kingsoft.
Chinese concerns about data security and espionage have even extended to Tesla, with officials sometimes barring the company’s electric vehicles from sensitive areas.
Of course, the United States has similar espionage concerns about Chinese-made hardware and software.Washington urges U.S. telcos Divest Huawei And banned Chinese developer ByteDance’s TikTok from being used on government devices. The United States is currently discussing whether to completely ban TikTok from entering the US market.
replace
Another threat to Apple may be on the horizon.
Huawei, once the world’s largest smartphone maker, quietly unveiled the Mate 60 Pro last week.The performance of this phone can keep pace with Apple’s iPhone, and its processor is the only one in the world some years behind the leading edge. The technological achievement comes despite years of U.S. controls on the sale of advanced chips and chip-making equipment to Huawei and China to cripple the country’s semiconductor industry.
On Friday, Huawei announced More powerful A version for the Mate 60 Pro, with more memory and connectivity to Chinese GPS rival Beidou.
While Huawei has remained silent on the launch of the phone, Chinese state media has no. “The resurgence of Huawei smartphones after three years of forced silence is enough to prove that the extreme suppression by the United States has failed.” wrote Global Times, A state-run English-language media outlet.
The U.S. Commerce Department said Thursday it will investigate How Huawei gets access to advanced chips made by the company also blacklisted SMIC is China’s largest chipmaker.
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