According to those acquainted with the situation, China has prohibited officials at central government organisations from using Apple’s iPhones and other foreign-branded smartphones for work or bringing them into the office.
Officials at Central Government Organisations
According to the report, employees were given the orders by their supervisors in workplace chat groups or meetings in recent weeks, though it was unclear how widely the directives were spread.
The prohibition comes ahead of an Apple (AAPL.O) event next week, which analysts say will be about the launch of a new line of iPhones, and may cause alarm among foreign companies working in China as Sino-US tensions rise.
Apple and China’s State Council Office
Apple and China’s State Council Information Office, which handles media inquiries for the Chinese government, did not respond quickly to any source’ requests for comment.
The stock of the iPhone maker was down 1.5% in early trading.
For more than a decade, China has worked to lessen its reliance on foreign technologies, requiring state-owned enterprises such as banks to use local software and pushing domestic semiconductor chip manufacturing.
As concerns about data security mounted, Beijing stepped up its campaign in 2020, proposing a “dual circulation” growth model to lessen reliance on international markets and technology.
China Asked Large State-Owned Firms
In May, China asked large state-owned firms to play a vital role in its quest to achieve technological self-sufficiency, upping the stakes in the race amid rifts with the US.
Sino-US tensions have risen as Washington works with allies to deny China access to critical equipment required to keep its semiconductor industry competitive, while Beijing blocks shipments from important US corporations such as planemaker Boeing (BA.N) and chipmaker Micron Technology (MU.O).
Several analysts said on Wednesday that the reported move demonstrated that Beijing was not ready to spare any American corporation in its efforts to minimise its reliance on American technologies.
D.A. Davidson Analyst
“Not even Apple is immune… “It employs hundreds of thousands, if not millions, of workers in China to assemble its products through its relationship with Foxconn,” D.A. Davidson analyst Tom Forte said.
This “should inspire companies to diversify both their supply chain and customer concentrations in order to be less reliant on China if tensions worsen.”
China is one of Apple’s most important markets, accounting for approximately one-fifth of its revenue.
However, given the popularity of the iPhone in China, little immediate impact on earnings is predicted, according to CFRA Research analyst Angelo Zino.
During a recent visit to China, US Commerce Secretary Gina Raimondo stated that US companies had complained to her that China had become “uninvestible,” citing fines, raids, and other steps that had made doing business in the world’s second-largest economy dangerous.
China’s latest limitation is comparable to US sanctions on Chinese smartphone maker Huawei Technologies (HWT.UL) and short video platform TikTok, which is owned by China’s ByteDance.
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