What’s revolutionary, ergonomic, smart, light, truth be told, expensive, and from now on under a ban? Well, if you've been following the news, you might already know (if not, we'll fill you in). China has curbed the use of iPhones by government officials during working hours. The big question now is how much Apple stands to lose in total.
Beijing has issued directives to government employees across China, prohibiting the use or presence of iPhones in the workplace. This ban applies to state-owned enterprises and government-affiliated organizations. Several agencies have already instructed their employees not to bring iPhones to work, and there are indications that the ban will be expanded further. Starting next month, employees handling sensitive information won't be allowed to bring not just their iPhones but also Apple Watches and AirPods to work. To get the extent of all that’s happening, China boasts more than 150,000 state-owned companies, employing over 56 million people as of 2021, according to state media.
The ban on Apple product usage is seen as a move by Beijing to reduce its reliance on US technology. However, this development doesn't come as a surprise. China's central government has imposed restrictions on the use of foreign-made technology in government-affiliated workplaces since at least 2018. Many Chinese employees have a separate phone for work.
When it comes to the stock market, whether you saw a development coming or not doesn't really matter. The process is quite straightforward – news emerges, and it sets the ball rolling. As you might have guessed, this time it’s been all downhill; the Apple stock price has lost almost 6% over the past two days, resulting in a market cap drop of over $200 billion.
China represents Apple's third-largest market and contributed 18% of its total revenue in 2022, totaling $349 billion. It's also where Apple's manufacturing facilities are located. iPhones are immensely popular in China, and there's optimism that strong demand from the private sector will more than offset the negative impacts of a public-sector ban. Besides, one should not forget Apple is the world’s most valued company with a market cap of $2.8tn.
The Cupertino-based company is set to host its press event on September 12. The visually appealing event, streamed live on Apple's website, is expected to unveil the latest addition to the iPhone lineup – the iPhone 15. Projections indicate robust sales for the iPhone 15 in China, with Wedbush analysts estimating around 85 million units to be sold across Asia upon release. This is in line with the number of iPhone 14 units sold when it was launched last year. We'll have to wait and see.
Anyway, you know rule #1 – while analysts' opinions provide valuable insights, they shouldn't be your sole basis for analysis. Keep an eye on key economic events and announcements and utilize a variety of statistics and indicators to conduct thorough and effective research.
