China has reportedly banned government agency officials from using iPhones and other foreign devices, as part of a broader cybersecurity led directive to switch to domestic technology.
News of the ban, alongside China-based Huawei's unexpected smartphone launch, has been bad news for Apple — with the company's stock price tumbling by 6.4% in just two days.
This is the latest development in China and the US's proxy war over technology, with a number of US states taking similar actions to ban TikTok from Government devices this year.
China Extends iPhone Ban For Government Officials
Chinese authorities have ordered officials at government agencies not to bring iPhones and other foreign-branded devices into work with them, according to a recent report from the Wall Street Journal.
Employees were given instructions by their superiors in workplace chat groups or in-person meetings, and the prohibition is reportedly coming into effect this month people familiar with the matter have revealed.
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It's unclear how widely the policy will be implemented, but the order expands on a ban on all foreign smartphones, computers, and operating systems that's been in place in Beijing-based agencies since 2019.
This latest ban is also more stringent than past crackdowns, representing an increasingly hard-line approach the Chinese government is taking to limit the flow of home-grown data traveling outside of the country.
As China-US relations grow increasingly hostile, Chinese President Xi Jinping has implemented a number of measures in recent years aimed at safeguarding national information. For example, this July, the National People’s Congress (NPC) revised its anti-espionage law, giving Beijing more power than ever before to penalize perceived threats to China's national security.
How Badly Has Apple Been Hit?
Unfortunately for Apple, China's latest development has hit its stock evaluation pretty hard. Following China's latest clampdown, $200bn has been knocked off Apple's share price, representing a 6% drop.
The news has impacted manufacturers hard too, with the shares of Qualcomm – the world's biggest smartphone chip supplier – dropping by 7% on Friday, and South Korea's SK Hynix falling by 4% on Friday.
But China's iPhone ban for government workers isn't the only hurdle Apple's faced this month. Last week, Chinese-based smartphone manufacturer Huawei unexpectedly launched its Mate 60 Pro smartphone – an iPhone rival with a powerful new 5G Kirin 9000s processor.
The Seattle-based manufacturer still boasts the world's highest stock evaluation, so despite stock market turbulence it's safe to say its monopoly isn't going away any time soon.
However, with iPhone sales continuing to dip, and Beijing reportedly preparing to invest $40 billion in its chip-making industry, it's likely that Apple will face growing competition from China's Huawei going forward.
US and China's Proxy War Continues
While China has been taking a hastened approach to data security for years, it's likely its latest order is in retaliation to similar measures deployed by US officials.
In March, the US government came one step closer to banning the Beijing-based social media platform TikTok over concerns that the app is a threat to national security. If the proposed bill is put through, US President Joe Biden will have the authority to prohibit its commercial use across the country.
Due to the explosive popularity of the app, most experts believe a nationwide ban will be unlikely. But with several US states including Texas, New York, and Nebraska already banning TikTok on state-issued devices, it's clear the US is matching China's hardline approach to national data security.