Apple (AAPL) shares fell 4% on Wednesday following a report that China has banned its government officials from using the company’s iPhones for work, as part of Beijing’s efforts to reduce its reliance on foreign technology and strengthen cybersecurity.
News of the ban was first reported by the Wall Street Journal, which interviewed several people familiar with the matter.
The ban is part of Chinese President Xi Jinping’s efforts to reduce the country’s reliance on foreign technology and strengthen cybersecurity amid rising geopolitical tensions with the US.
Apple and its devices enjoy widespread popularity in China, both in the private sector and among government officials. China is both an important consumer market and a manufacturing hub for the tech giant.
Apple employs millions of people to make iPhones – the majority of which are made in China – and other flagship products through its network of contract manufacturers and suppliers. The company earns just under a fifth of its revenue from China, with sales in the country totalling $15.76 billion in the quarter to July 1, up 8% from a year earlier.
The ban mirrors similar moves by the US government against Chinese tech companies and apps, including Huawei and TikTok.
Since last year, the federal government and 26 states have taken action to restrict or ban the use of TikTok in government offices. The agencies argued that the Chinese government could use the app to spy on US citizens and collect sensitive personal information.
The Biden administration also considered the possibility of cutting Huawei off from US suppliers, but no decision has been made.
Apple is no stranger to government scrutiny, at home or abroad. The company, along with other tech giants such as Amazon (AMZN), Google (GOOGL), Meta Platforms (META) or Microsoft (MSFT), has been targeted by regulators in the US and Europe for alleged anti-competitive business practices and monopoly status.
