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China bans government officials from using iPhones

 (Apple)
(Apple)

China has reportedly banned the use of iPhones among central government officials, just days before the unveiling of the iPhone 15, according to The Wall Street Journal.

The news saw Apple shares drop by around four per cent. A follow-up report from Bloomberg suggests this ban is set to expand to include state-owned companies and agencies.

Apple CEO Tim Cook visited China in March 2023, during which he described the company’s interactions with the country as “a symbiotic kind of relationship”.

It is a somewhat uneasy one, though, as seen by Apple’s move to shift significant parts of its production from China to India.

The first rumours of iPhone production in India began in 2015, while the first phone to be assembled there was the iPhone SE in 2017.

Apple reportedly produced seven per cent of its phones in India in 2022, and estimates suggest up to 18 per cent of its phones could be made there by the end of 2025.

Could iPhones be banned in China?

Apple has diversified production in an attempt to protect itself from the effects of being drawn into political battles, which have seen Huawei’s smartphone business all but decimated in the West.

Huawei was put under sanctions by the US in 2019, resulting in it being unable to use Google’s software, or 5G chips from Western companies.

The company was the second-biggest seller of smartphones globally in the third quarter of 2019 according to Gartner, but now commands just a small fraction of that presence. Its estimated three to four per cent share of smartphone shipments is buoyed by still-strong sales in China.

Could Apple effectively be booted out of China in the way Huawei was all but kicked out of the US?

China was reportedly the biggest single market for iPhone sales in the second quarter of 2023, per a TechInsights report, accounting for 24 per cent of global shipments compared to the US’s 21 per cent.

The iPhone is hugely popular in China, commanding between 16 to 20 per cent of smartphone shipments according to Counterpoint Research figures. Restricting the iPhone in China would be hugely unpopular.

Chinese restrictions on Apple’s iPhone series would also need to be potentially more wide-ranging than those imposed on Huawei, as it is as much a platform, software, and services provider as a hardware manufacturer. Pre-sanctions Huawei phones largely relied on Google’s platform, software, and core services.

Huawei has managed to overcome one of the serious effects of the sanctions with the just-announced Huawei Mate 60 Pro, though.

It is the first 5G Huawei phone released since 2020 using a Huawei-designed Kirin 9000s chipset manufactured in partnership with Chinese fabricator Semiconductor Manufacturing International Corp (SMIC).