Apple Shares Slumps After Reports that China Might Ban iPhone Use by Government Employees

Apple shares fell more than 3% on Thursday September 7th 2023, following a 3.6% decline a day before, after several reports suggested that Chinese government workers could be banned from using Apple's iPhones.

China has ordered officials at central government agencies not to bring iPhones into the office or use them for work, The Wall Street Journal reported on Wednesday from anonymous sources. It was unclear how widely the bans were issued. Bloomberg reported on the 7th that the scope of the ban may be extended to state-owned enterprises.

China is Apple's third-largest market, accounting for 18% of total revenue last year. Apple is gearing up for its upcoming September event that is set to take place next Tuesday. The event is expected to unveil the new iPhone 15 models, the Apple Watch Series 9, the Apple Watch Ultra 2, and a new version of the AirPods Pro charging case with USB-C. It is still unknown that how the new products will be impacted by the ban.

The restrictions are seen as a response to the U.S. ban on Huawei and a similar ban on officials using China-owned TikTok. As Sino-US relations hover around decades of lows, both superpowers pay more attention to national security and worry about data leakage. In July this year, China began to implement a comprehensively revised anti-espionage law.

Many states in the United States prohibit public officials from using the short video application TikTok on work distribution devices such as mobile phones and laptops, and in some cases on state wireless networks. Members of the U.S. Congress have introduced a bill to either ban TikTok across the United States or give the government under the leadership of the president more power to ban TikTok.

Hangyu Fan, Max Ren Contributed to this article