Apple is set to release its new iPhone 15 range next Tuesday, September 12, but uncertainty looms over its significant Chinese market. In the past two days, Apple's shares have plummeted by nearly 7%, triggered by reports in the US media alleging that the Chinese government has banned some of its employees from bringing iPhones to work.
On Wednesday, Apple's shares saw a sharp decline of more than 4%, followed by an additional drop of nearly 3% on Thursday, with a brief dip of over 4% at one point. The reports indicated that China had instructed officials at central government agencies not to use iPhones for work purposes or bring them into the office.
Greater China, which includes Hong Kong and Taiwan, represents Apple's third-largest market, contributing to 18% of its total revenue amounting to $394 billion USD. Furthermore, it is where the vast majority of Apple products are manufactured. Apple declined to provide comments in response to media inquiries.
During Apple's June quarter, sales in Greater China increased by 8% compared to the previous year, totaling $15.76 billion USD, making it the company's fastest-growing region. On an earnings call, Apple's CEO Tim Cook highlighted the trend of users switching from Android phones to iPhones, emphasizing its significant impact on their results.
While a government-wide ban on iPhone usage could potentially reduce iPhone sales in China by up to 5%, CNBC reported that Bernstein analyst Toni Sacconaghi suggested in a Thursday note that a more significant threat to Apple could arise if these bans signal to everyday citizens to favor electronics from Chinese companies. Sacconaghi wrote, "Perhaps more importantly, restricted iPhone usage among government employees could negatively impact sales among consumers, including family members and the general populace, and could be part of a broader move by the Chinese government to promote the use of domestic technology."
Amidst these concerns, there have been widespread media reports regarding new features and possible pricing for the upcoming iPhone family, with much of this information coming directly from Apple, which has initiated a video countdown leading up to next Tuesday's product unveiling.
Despite this week's price decline, which has largely offset the 10.7% slide in shares since the June quarter results were released, Apple's shares concluded Thursday at $177.56 USD, down 2.92%. They subsequently rose back above $178 USD in after-hours trading.