The tech giant Apple has seen a significant reduction of $200 billion in its market value within the last 48 hours, partly attributed to China’s decision to prohibit its government from using iPhones. On Thursday, Apple’s shares experienced a notable 3.4% decline, marking the company’s most substantial daily drop in over a month and positioning it as one of the weakest performers in the Dow Jones Industrial Average.
China stands as Apple’s largest overseas market, with Chinese sales accounting for approximately one-fifth of the company’s total revenue last year, providing context to the magnitude of this loss. China’s motivation behind this ban appears to be a combination of national security and economic concerns, as suggested by Paul Haenle, a former China director on the National Security Council under former Presidents George W. Bush and Barack Obama.
Trouble Brewing for Apple: China’s Potential ‘Bad News’
The news had a ripple effect on the tech sector, with the Nasdaq Composite slipping by around 1% on Thursday, and the semiconductor industry witnessing a drop of over 2%. Given that the majority of Apple’s products are manufactured in China, the company is a significant contributor to job creation in the country through its contract manufacturers and suppliers. Apple holds a dominant position in the Chinese market, particularly in the smartphone sector, and as a result, it is anticipated that this ban will result in a staggering $200 billion loss in revenue for the company.