Apple shares fell about 3% on Thursday, following a 4% decline on Wednesday, amid reports suggesting that the Chinese government may ban its workers from using iPhones. The reported restrictions, which have not been officially announced, raise concerns that Apple’s products could become entangled in the escalating tensions between the US and China. Greater China, including Hong Kong and Taiwan, accounts for 18% of Apple’s total revenue and is where the majority of its products are assembled. While the ban on government employees could impact iPhone sales, the larger threat lies in encouraging consumers to use domestic technology instead. Analysts also cite increased competition from Huawei as a reason for concern.
Chinese retailers have recently started taking orders for Huawei’s new phone, which incorporates a Chinese-manufactured chip and has garnered significant attention on social media. The US imposed sanctions on Huawei in 2019, hampering its business and raising questions about the efficacy of restrictions on chip-manufacturing technology. Despite the potential challenges, Apple’s recent earnings report indicated growth in Greater China sales, with users switching from Android to iPhones.