Made on Wednesday The Wall Street Journal It is known that some Chinese government officials have been instructed not to use or bring iPhones or other foreign brand devices to the office. The instructions were given in meetings or via chat groups.
The Chinese government does not want to confirm the report. Also, not all officials have been informed of the ban, according to a tour by Reuters. Yet rumors are abuzz and China may even want to extend the iPhone ban to state-owned companies, sources report to Bloomberg.
It is therefore not inconceivable that even Apple, the most valuable listed company in the world, becomes a pawn in the geopolitical chess game between the US and China. Tensions between the two countries continue to rise. For example, the Americans are trying to thwart the supply of chips to the Chinese, the indispensable components in almost every piece of electronics and therefore the lifeblood of economic progress. Conversely, the Chinese hit back with export restrictions on important earth metals.
The reports about the iPhone ban immediately caused nervousness among investors. Apple shares went from just under $190 to $177.56 in two days, a loss of more than 6 percent. Apple thus lost 190 billion dollars (about 177.5 billion euros) in market value on Thursday. That loss is almost as much as Shell’s entire market value. Apple is now only worth $2,776 billion.
Secret deal
It is clear that the export ban can hurt Apple. The company generated 19 percent of its turnover last quarter from the ‘Greater China’ region, which also includes Hong Kong, Taiwan and Macau. That is the third largest market, after the US and Europe, where 43 and 25 percent of turnover comes from respectively. Also, the lion’s share of equipment is produced in China, although some has been moved to India.
Apple has not yet responded to the messages. The company is expected to try behind the scenes to change the Chinese’s minds. It also did so in 2016, when Apple’s chairman Tim Cook went to China to avert unfriendly government policies. The lobbying ultimately led to a secret deal worth $275 billion. In exchange for friendly treatment, Apple promised to invest in the country for five years.
