Apple shares fell 2.9% on Thursday after reports that the Chinese government plans to extend its iPhone ban to Chinese government-funded agencies and companies.
Investors are concerned about the ability of the world's largest public company to operate in the world's second-largest economy .
Apple suffered its biggest one-day drop in a month on Wednesday, losing $200 billion in market value in two days, and its stock is now the worst performer in the Dow Jones Industrial Average.
China's ban could be a bad sign for Apple.
China is the world’s largest overseas market for Apple products, and China accounted for about a fifth of the company’s total revenue last year. Apple doesn’t break out country-by-country revenue figures, but analysts at TechInsights estimate that iPhone revenue from China surpassed that from the United States last quarter. Apple also manufactures the majority of its iPhones in factories in China.
Apple also has a large role in Beijing’s economy, so the company “has often been viewed as being able to circumvent restrictions from the Chinese government,” Brandon Nispel, an analyst at KeyBanc Capital, said Wednesday. The recent proposed bans raise a key question, he wrote: “Is the Chinese government changing its mind?”
On Wednesday, the Wall Street Journal reported that China has banned the use of iPhones by central government officials, and store managers have begun informing employees via chat groups and meetings.
On Thursday, Bloomberg reported that the bans were being expanded to include companies with government investment, including energy giant PetroChina, which employs millions of people and controls a huge swath of the Chinese economy.
Also on Thursday, analysts at Bank of America said the iPhone ban came shortly after the launch of a high-end flagship phone from phone maker Huawei, a coincidence the analysts called “quite interesting.”
The US government said on Tuesday it is investigating the new phone model.
Many technology companies also fell after the news broke, with the NASDAQ Composite falling about 0.9% on Thursday and the entire semiconductor sector falling more than 2%.
CNN sent requests for comment to Apple and the Chinese Foreign Ministry, but has not yet received a response.
Nguyen Quang Minh (according to CNN)
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