The actions of Manzana fell over the past week after reports leaked that China, one of the company’s largest markets, had banned government employees from using iPhonesas Beijing intensifies its current technological war with the United States.
This produced a 3.6% drop in Wall Streetthe New York Stock Exchange, which is offset by a broad upward trend for technology stocks this year, which had seen Apple rise 46% in 2023. But everything could change very quickly.
Rematch. China’s ban on its officials from using iPhones to work or take them to the office comes at the same time as the launch of a new smartphone from the Chinese company Huawei last week, a team that could challenge Apple’s strong position in the sector. And it is one more step in the trade war between Beijing and Washington.
China has managed to build a domestic smartphone industry, but many of these use American technology in their chip developments. Something to which North Americans have recently cut off access, seeking to relegate the Asian giant.
Manzana is hugely popular in China, but is under fire on multiple fronts with the ban on iPhone and the challenge from rival Huawei, which could affect the company’s sales in a critical market, which helped the company excel in recent years and generated almost a fifth of its revenue last year, about $74 billion. Dollars.
Besides, Manzana is vulnerable because of its dependence on manufacturing in China (almost all major devices are made there, but potential animosity from Beijing resulting from the ban forces it to evaluate other possibilities), which could significantly complicate its global supply chain. However, it is unclear to what extent Beijing’s ban on iPhones will be enforced through government agencies.
The Wall Street Journal, which first reported the ban, said its scope was unclear, adding that it was an expansion of a restriction that has existed for years at a select number of government agencies.
The Journal noted that some central government regulators had also received similar instructions, and Bloomberg confirmed the report, hinting at a much broader scope. The restriction would apply to “a wide range of state-owned companies and other government-controlled organizations,” Bloomberg reported, a category that could be in the millions given the control Beijing exerts over China’s society, governance and economy.
Technology
The development behind the new smartphone presented by Huawei last week, marks a major technological breakthrough for China and suggests advanced capabilities in microchip production, which many considered to be beyond current horizons for the Asian giant. Microchips, a crucial component of many electronic devices, are also a key driver of the global economy and trade, but they also have an impact on politics.
As part of its ongoing technology war with Beijing, Washington has led Western controls on exports of the equipment needed to make advanced chips, which only a handful of companies around the world own. But Huawei’s Kirin 9000s 5G chipoffers the company, and therefore China, a possible way to circumvent this trade restriction and the ability to compete again with American companies on the global stage.
The national security advisor of the United States, Jake Sullivan, noted this week that the US government is investigating the chip to determine whether trade restrictions on its production had been circumvented. And many American media are now wondering if the chip was part of a “technological theft,” a tacit accusation by the White House of its trade enemies in the East.
What is clear is that the war is open, and there is a pattern of the Chinese government, which previously banned Tesla from entering at its facilities (supposedly for security reasons, as CNN reported in June 2022). But on Apple’s side, it is clear that the measure was a surprise. The executive director of the multinational, Tim Cookpaid a visit to China in March, underscoring the country’s importance as a market and manufacturing hub, contributing approximately 19% of Apple’s total revenue.
But if China places more obstacles on the apple company, it could move its factories to another country (these options were already studied in 2021 during the pandemic). Hon Hai Precision Industry Co., which assembles the iPhone confirmed that it is capable of move production completely out of China in case the trade war continues to escalate, according to Bloomberg and The Wall Street Journal. And for now there seems to be no ceiling in a war between the superpowers that has been brewing since the presidency of Donald Trump.
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