Apple Inc. faced a significant market tumble in premarket trading, threatening to erase a staggering $194 billion in market value over just two days. The cause of this financial turmoil? China’s plan to extend its ban on the use of iPhones to government-backed agencies and state companies.
In the lead-up to trading hours, shares of Apple, headquartered in Cupertino, California, plummeted by as much as 3.2%. This decline followed a 3.6% slump the previous day, marking the second sharp drop in the company’s shares within a month.
China, serving as Apple’s largest foreign market and a crucial global production hub, has embarked on a years-long mission to eliminate foreign technology from sensitive sectors. This recent move also aligns with Beijing’s broader strategy to decrease its dependence on American software and hardware components.
If Beijing follows through with this unprecedented iPhone blockade, it could reverberate throughout the US technology industry, impacting companies that rely on both sales and production within China. Reports of China’s new measures sent Apple suppliers across the globe into a downward spiral.
Nonetheless, some bullish analysts, like Daniel Ives of Wedbush Securities, believe that the magnitude of the impact of an “iPhone ban” is exaggerated. Ives contends that this move would affect less than 500,000 iPhones out of the approximately 45 million expected to be sold in China over the next year. He pointed out that, despite the uproar, Apple has experienced substantial market gains in the Chinese smartphone arena.
The situation remains fluid, and market experts are closely watching how this development will affect Apple’s operations in China and its broader implications for the technology sector.