First Business News Portal in English from Nepal
KATHMANDU: Over the past 48 hours, Apple’s stock has experienced a turbulent journey, shedding an astounding $200 billion in market value. This drastic decline has been triggered by reports of stringent Chinese regulations affecting iPhones within government offices and state-owned entities.
The shares of the world’s largest publicly-traded company plunged for the second consecutive day, registering a 2.8 percent drop to $177.79 during late morning trading. Bloomberg’s report underscored the substantial impact on Apple’s market capitalization during this short timeframe.
The initial blow struck on Wednesday, with a 3.6 percent drop in share prices, following a revelation by The Wall Street Journal that China had prohibited the use of Apple smartphones in central government agencies. However, this prohibition was just the tip of the iceberg, as more unsettling news emerged on Thursday.
Reports surfaced suggesting that China planned to extend this ban to encompass government-affiliated agencies and state-owned enterprises, amplifying the consequences of this policy within a centrally-planned economy.
Notably, Apple and Chinese officials have maintained silence on these developments, refraining from offering any official comments to AFP.
This situation unfolds against the backdrop of escalating tensions between Beijing and Washington, with China aiming to assert its dominance in the tech industry.
Chinese tech giant Huawei recently introduced a smartphone equipped with a locally-produced processor, celebrated as a “triumph” in Chinese state media, particularly in light of US sanctions.
Apple, which reported $15.8 billion in revenues from China in its most recent quarter, accounting for nearly 20 percent of its total revenues, appeared to be defying the trend with increased sales in the Chinese market during a period of declining overall sales.
Analyst Patrick O’Hare of Briefing.com expressed concerns about the implications this may have for other tech companies. He noted that if China continues to make business operations difficult for a prominent player like Apple, which has enjoyed a favorable working relationship in the country, it could set a precedent for other US companies conducting business in China.
On the flip side, Wedbush Securities analyst Dan Ives offered a more optimistic perspective. He estimated that even if a Chinese government ban were to materialize, it would only impact a fraction of the projected iPhone sales in the country—less than 500,000 out of an anticipated 45 million units to be sold in the coming year.
Ives emphasized that Apple has been making significant strides in the Chinese smartphone market, with increasing sales providing the company with an added boost.
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