In a move that could have significant implications for foreign companies operating in China, the Chinese government has reportedly ordered officials at central government agencies to cease using Apple iPhones and other foreign-branded devices for work purposes. This directive includes a ban on bringing such devices into government offices, The Wall Street Journal said in its news report.
According to the report, these instructions were communicated to staff members in recent weeks by their superiors through workplace chat groups or during meetings. It remains unclear how widely these orders have been disseminated among government employees.
The timing of this ban is noteworthy, as it comes just ahead of an upcoming Apple event where analysts anticipate the launch of a new line of iPhones. This development has raised concerns among foreign companies operating in China, especially as tensions between China and the United States continue to escalate.
While the Wall Street Journal report specifically mentions Apple, it does not name other phone makers affected by the ban.
“Chinese consumers are increasingly willing to pay for high-quality products,” Canalys Analyst Amber Liu said in its report in July. “The average selling price of smartphones exceeded US$450 last year and is expected to keep rising in the coming quarters.”
Industry analysts have noted that this move underscores Beijing’s determination to reduce its reliance on American technology companies, including even giants like Apple. Tom Forte, an analyst at D.A. Davidson, commented on the situation, emphasizing that “even Apple is not immune” to the changing dynamics in China, where it maintains a substantial workforce through its relationship with Foxconn.
Forte also suggested that this development should serve as a reminder for companies to diversify their supply chains and customer bases to reduce their dependence on China, especially in the event that tensions between the U.S. and China escalate further.
China is a crucial market for Apple, accounting for nearly a fifth of its total revenue. Despite the ban, analysts like Angelo Zino from CFRA Research believe that there may not be an immediate impact on Apple’s earnings due to the popularity of iPhones in China.
Apple is the third largest smartphone brand in China with 16 percent share in Q2 2023, according to Canalys. Apple shipped 10.4 million smartphones to China during April-June 2023.
This restriction on foreign-branded devices in China follows similar bans imposed by the United States on Chinese companies, including smartphone maker Huawei Technologies and the short video platform TikTok, which is owned by China’s ByteDance. The tit-for-tat measures between the two economic giants underscore the ongoing trade and tech tensions between the two nations, Reuters news report said