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Apple stocks decreased 4%, triggering a rout in the US stock market, after the Chinese government widened curbs on iPhone use

September 8, 2023: On Thursday, Apple stocks decreased 4%, triggering a rout in the US stock market, after the Chinese government widened curbs on iPhone use.

The reported conditions, which the Chinese state has not publicly announced, present concerns that Apple’s products could get caught up in international tensions between the U.S. and China.

Greater China, including Hong Kong and Taiwan, is Apple’s third-largest market, accounting for 18% of total payment of $394 billion. It’s also where the vast majority of Apple products are assembled. The tech giant declined to comment.

On Wednesday, the Wall Street Journal reported that China has ordered officials at central state agents not to bring iPhones into the office or use them for work. It needed to be made clear how widely the bans were issued.

On Thursday, Bloomberg News reported that the ban could spread to other state companies and government supported agencies.

While a ban on all state workers could reduce iPhone unit sales in China by nearly 5%, Bernstein analyst Toni Sacconaghi wrote in a Thursday note it would be a more significant threat to Apple if the bans sent a signal that everyday citizens should instead use electronics made by Chinese companies.

“Perhaps more importantly, restricted use of iPhones among state employees could negatively impact sales among consumers and could be part of a broader move by the Chinese government to promote usage of domestic technology,” Sacconaghi noted.

Dan Niles, portfolio manager at Satori Fund, said that he sold his stake in Apple and is shorting the company, mentioning the possibility of a government iPhone ban and enhanced competition from Huawei.

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