Apple Shares Fall On Reports Of China iPhones Restrictions

Apple shares sank substantially for the second day in a row Thursday after rumors of severe Chinese bans on iPhones in government offices and state-backed entities.

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In late morning trading, shares of the world’s largest publicly traded firm were down 2.8 percent at $177.79.

On Wednesday, shares slid 3.6 percent following a Wall Street Journal story that China had banned the use of Apple devices in core government institutions.

On Thursday, Bloomberg News reported that China planned to extend the prohibition to government-backed agencies and state-owned enterprises, increasing the policy’s impact in a centrally controlled economy.

Apple and Chinese officials have not responded to requests for comment from AFP.

The move comes amid intensifying tensions between Beijing and Washington.

The Bloomberg story said a release last week of a Huawei smartphone employing a made-in-China processor was hailed in Chinese state media as a “triumph” in the wake of US sanctions.

Apple reported $15.8 billion in revenues from China in the most recent quarter, nearly 20 percent of total revenues. Executives pointed to the uptick in China sales in a period when overall sales fell. analyst Patrick O’Hare said the Apple situation has implications for other tech companies.

“The worry for the market is that, if China purposely chooses to make business difficult for a company like Apple, which has a good and important working relationship in China, then it can do so for a lot of other US companies doing business in China,” O’Hare said.

But Wedbush Securities analyst Dan Ives estimated that a Chinese government ban would affect less than 500,000 iPhones of roughly 45 million projected to be sold in the country in the next year.

“We believe despite the loud noise Apple has seen massive share gains in China smartphone market,” Ives said, adding that rising sales give Apple “incremental momentum on this front.”

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