Apple Share Price Drop 6% in a Week: China iPhone Ban Scares Investors

Apple's stock price has fallen by 5.52% in the past week, from $187.94 on 31st August to $177.45 on 7th September 2023. The drop was seen amid reports that the Chinese government is considering banning the use of iPhones and other foreign-brand devices by government companies and state agencies in the country. 

The country wants to reduce dependency on American companies and foreign technologies. It aims to enhance cybersecurity during the rising tensions with the U.S. The ban can also be seen as a clever move to safeguard valuable information from other countries' governments.

Apple Shares Drop 6% in a Week: Historical Share Price Performance

Apple Shares Drop 6% in a Week: Will China Market wipe out iPhone Sales?

China is Apple's third-largest market. It accounts for about 18% of Apple’s sales generating a total revenue of $394 billion. Thus, the ban could be a big blow to Apple, as it would cut off the company from a large and growing market.  

For more information on the Market Share of every country, click here.

The Chinese market is a major driver of Apple's growth with a 24.32% market share. In Q2 2023, 24% of the total ‌iPhone‌ shipments were to China while the U.S. market recorded 21%. 

Looking at the previous records, Apple sold an estimated 46 million iPhones in China in 2022, up from 38 million in 2021. This growth was driven by the increasing popularity of smartphones in China and the growing disposable income of the Chinese middle class.  

Apple Shares Drop 6% in a Week: Foxconn Dependency  

Apple is heavily reliant on Foxconn, a Taiwanese company, to manufacture its iPhones. Foxconn has major manufacturing units in China. The unit sends most of the iPhone shipments to different markets around the world. Therefore The ban will affect the manufacturing of iPhones. 

Apple Shares Drop 6% in a Week: Time for Rise of New Competitors?

Huawei has launched a new 5G smartphone, the Mate 60 Pro, which is seen as a viable homegrown alternative to the iPhone. Priced at $960, it's an achievement for Huawei since it's restricted from accessing Western chipmaking technology. 

The phone gets the attention in China for its advanced tech and domestic production. It features a chip from Chinese company SMIC, indicating progress in China's tech capabilities. While it may not be popular in the West due to government bans, it could pose a challenge to the iPhone's success in the Chinese market.

Apple Shares Drop 6% in a Week: Key Takeaways

• China has prohibited government officials from using iPhones for work.
• The Chinese Government aims to decrease reliance on foreign tech and bolster cybersecurity due to heightened geopolitical tensions with the U.S. 
• This decision comes despite Apple generating a significant portion of its revenue from China, where it's a crucial market and manufacturing center.