Tue. Jul 23rd, 2024

Apple is increasingly finding itself in a rather problematic situation. Months after being banned by certain departments of the Chinese government, Apple’s iPhone was again banned by a number of government offices and state-backed businesses, who have asked employees to use local

Numerous Chinese government agencies and state-backed firms have recently implemented a directive prohibiting employees from bringing iPhones and other foreign devices to work, according to a Bloomberg report.

This is the second time that Chinese entities have banned Apple’s iPhones spanning at least eight provinces, marking a significant escalation in Beijing’s efforts to reduce dependence on American technology, posing potential challenges for tech giants Apple Inc. and Samsung Electronics Co. in the world’s largest mobile market.

Bloomberg quotes sources who reveal that state firms and government departments issued these instructions in the past month or two, directing employees to use local brands instead. The broader, coordinated effort is part of Beijing’s strategy to decrease reliance on foreign technology, expanding a ban that was initially limited to the most sensitive departments.

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Apple’s shares experienced a dip following reports of the widening bans. While Chinese software and hardware have gradually replaced American products over the years, this new directive poses a direct threat to Apple’s market share in China, which constitutes about a fifth of its revenue.

The ban has not only affected major cities like Beijing and Tianjin but has spread to smaller firms and agencies in lower-tier cities, suggesting a broader movement. The orders reportedly originated from cities across prosperous provinces, including Zhejiang, Guangdong, Jiangsu, and Anhui, to northern provinces like Shanxi, Shandong, Liaoning, and central Hebei, where the world’s largest iPhone factory is located.

While it remains uncertain how many government agencies have issued directives and the extent of their enforcement, the ban collectively presents a significant challenge for both Samsung and Apple, which are striving to sustain growth in a crucial market.

Apple, in particular, relies on China for about a fifth of its revenue, with CEO Tim Cook having worked to maintain positive ties with Beijing over the years.

The move is seen as part of a broader effort by Beijing to reduce foreign technology in sensitive environments and aligns with China’s push to achieve self-sufficiency in critical areas.

The ban could have repercussions for Apple and Samsung as they navigate a challenging market and evolving geopolitical dynamics between the US and China.

(With inputs from agencies)

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