Apple’s stock faced a significant downturn on Friday as reports surfaced regarding an expanded limitation on the use of iPhones among state employees in China. This development has ignited concerns about the sales prospects of Apple products in one of its largest global markets.
According to sources familiar with the matter who spoke to reporters, employees in at least three Chinese ministries and government entities have been instructed not to use iPhones during working hours.
Taiwan’s TSMC, the world’s largest contract chipmaker, and a prominent Apple supplier, witnessed a drop of approximately 0.7% in its stock price, surpassing the benchmark index’s 0.3% decline. Furthermore, shares of ASE Technology Holding, one of the world’s leading semiconductor testing and packaging companies, experienced a decline of over 2%, while Largan Precision Ltd, specialising in camera lenses, saw a drop exceeding 3%.
Allen Huang, the Executive Director of Mega International Investment Services in Taipei, expressed concerns that China might extend its restrictions on officials’ usage of iPhones. He attributed this potential escalation to the influence of Chinese nationalism on policy decisions, suggesting turbulent times ahead. Huang also pointed out that Huawei Technologies’ new smartphones would likely exert pressure on the sales of the upcoming iPhone 15, set to be released on Friday, September 22.
Luxshare Precision Industry, a Chinese manufacturer responsible for connector cables used in iPhones and MacBooks, as well as AirPods, faced a 1.5% decrease in its stock value. Luxshare also owns factories capable of producing iPhones. Last week, the company’s shares were negatively affected by Huawei’s product launch. In addition to this, Tokyo Electron, a Japanese chip equipment manufacturer, saw a significant 4% decline in its stock price on Friday.
China holds a crucial role in Apple’s global revenue, contributing nearly a fifth of the company’s earnings. Apple has maintained longstanding ties with the country, as highlighted by Chief Executive Tim Cook during his visit to Beijing in March.
China’s iPhone Ban Casts Shadow Over Apple, With Implications for Africa
Recent challenges faced by Apple, the tech giant, are sending shockwaves through African markets. Although Africa is not directly linked to the issues plaguing Apple, the continent’s growing role in the global tech industry and its economic ties to international markets make these developments a matter of keen interest.
Apple’s predicaments in China are causing supply chain reverberations that extend to African shores. While Africa may not be a central player in Apple’s vast supply chain, the continent contributes to global electronics manufacturing by providing essential minerals and resources. Any disruptions in Apple’s production or supply chain can have repercussions for African nations that rely on the export of these materials, potentially affecting local economies.
The economic implications are equally profound. Africa, home to several emerging economies with close ties to global markets, is susceptible to the impact of Apple’s performance. A decline in the stock value or profitability of Apple could dent investor confidence, causing fluctuations in African financial markets. This underscores the interconnectedness of the global economy and the importance of staying vigilant in monitoring international developments.
Furthermore, the consumer electronics market in Africa, marked by a burgeoning demand for smartphones like the iPhone and tech gadgets, is influenced by the global standing and product offerings of Apple. Changes in Apple’s strategies or market performance can indirectly affect consumer choices and preferences in the region, impacting both local and global tech companies operating in Africa.