Apple tumbles as fears grow over China iPhone curbs

NEW YORK: Apple experienced a nearly 4% decline on Thursday, triggering a sell-off in tech stocks. This decline was prompted by reports that China has expanded restrictions on iPhone use among government personnel, a significant market for the American tech giant. As a result of this decline, Apple was poised to lose approximately $100 billion in market value, marking its most significant one-day drop in over a month, following a similar decline on Wednesday. Other companies, including Apple suppliers and those with substantial exposure to China, such as Broadcom, Qualcomm, and Texas Instruments, saw their stock prices fall by 1.4% to 4.7%. The impact of Apple's drop also affected the three major US stock indexes. Earlier in the day, Reuters reported that Beijing had instructed employees at select central government agencies in recent weeks to cease using Apple mobile devices at work. This reported move heightened concerns about the financial consequences of escalating tensions between the United States and China. In recent years, the US has limited China's access to critical technologies, including cutting-edge semiconductor chips. Simultaneously, Beijing has sought to reduce its reliance on American technology and restricted shipments from US companies, including Boeing. Several Wall Street analysts noted that the iPhone restrictions illustrate that even a company with a strong relationship with the Chinese government and a substantial presence in the world's second-largest economy is not immune to increasing Sino-US tensions. These developments come at a time when Apple is contending with declining iPhone sales, with China being a notable exception in an otherwise disappointing quarterly earnings report from last month. Tom Forte, an analyst at DA Davidson, commented, "The restrictions have the potential to slow Apple's sales growth in China. This could present an additional challenge for the company." Some analysts also expressed concerns about potential sales impact due to Huawei 's new Mate 60 Pro smartphone. This device is powered by an advanced chip produced by Chinese contract chipmaker SMIC, marking a significant development for both companies affected by US sanctions. Huawei had faced declining sales in its home country due to these sanctions, allowing Apple to capture some market share. However, analysts at Bofa Global Research suggested that if Huawei can supply and scale its domestic Kirin 9000S chips, the Mate series phone could present an opportunity for the company to increase shipments and regain market share. Apple could potentially experience increased demand following an event next week, where it is anticipated to unveil its iPhone 15 lineup and new smartwatches.