Apple's Shares Continue To Tumble Amidst iPhone Ban Concerns In China

Apple's shares have been tumbling for the second consecutive day, losing the equivalent of Hungary's GDP, following news that the tech giant could face a partial iPhone ban in China, as reported by Euronews, with a byline by Dolores Kitanich and additional information from Reuters.

China is not only Apple's largest foreign market but also the company's global production base.

China's expanding restrictions on iPhone use by government personnel have intensified the sell-off of tech stocks on Friday, fueling concerns that Apple and its suppliers may be affected by escalating tensions between the US and China, as well as increasing competition from Huawei.

Over the past two days, Apple shares have fallen by 6.4%, resulting in a loss of $190 billion in market capitalization.

To put this in perspective, this is roughly equivalent to Hungary's GDP. However, it's worth noting that despite this decline, the tech giant is still valued at $2.8 trillion, approximately equal to France's economic output.

The sell-off was primarily driven by reports that Beijing has instructed employees at certain central government agencies in recent weeks to refrain from using iPhones at work.

China is not only Apple's largest foreign market but also the company's global production base.

Adding to the pressure on Apple, Huawei launched two new smartphones on Friday: the foldable phone Mate X5 and the Mate 60 Pro+ smartphone, a new addition to a series it unveiled the previous week, which garnered global attention for its success in overcoming US sanctions.

The unexpected release of these new products by China's "national champion," just days before Apple is set to unveil its new iPhones, has raised concerns about sales prospects in one of Apple's most significant markets.

Ivan Lam, an analyst at Counterpoint, stated, "We believe that Huawei's activity this time was well-prepared and not sudden. Our current outlook for the new product release is better than our previous estimation."

The extent of the restrictions on iPhone use remains unclear. Earlier reports from Bloomberg suggested that the ban would be broad, encompassing state-owned enterprises and other government-controlled organizations.

However, some staff members have reported that they have not received any such instructions.

Bank of America estimates that China accounts for up to 50 million annual iPhone sales, and a ban could result in a loss of 5-10 million units per year.

The timing of the ban is deemed "interesting" by Bank of America, as it coincides with the recent launch and availability of a domestic high-end smartphone, presenting a real alternative to the iPhone.

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