Apple is facing a new hurdle in its second-largest market, as China has ordered its central government officials to stop using iPhones and other foreign-branded devices, according to a new report from WSJ. The Chinese government have issued this order in the past few weeks through workplace chat groups or meetings. It is unclear how many officials are affected by the order. Following this news, Apple stock plunged more than 3% today, one of the worst single day losses in recent times.
The ban could hurt Apple’s sales and reputation in China, where it has a strong presence in the high-end smartphone segment and generates about 19% of its total revenue.
China’s move echoes the U.S. actions against Huawei Technologies Co. and TikTok, which have been banned or restricted by Washington over national security and data privacy concerns. The two countries have been locked in a tense rivalry over trade, technology and geopolitics over the past few years.
Apple has enjoyed a competitive edge over Huawei in China’s premium smartphone market, after the U.S. sanctions crippled Huawei’s ability to produce 5G phones. However, Huawei recently launched a new flagship phone that aims to challenge Apple’s dominance among affluent Chinese consumers. Moreover, the abrupt prohibition of iPhone is unexpected, considering that Apple has adhered to most of the Chinese government’s demands over the years. This entails deleting thousands of apps from the Apple App Store, eliminating VPN support, and more.
Apple has not commented on this story yet.