Apple slides as China plans to broaden iPhone ban

New York, Sep 7

Apple shares fell in the early pre-market hours in New York on another report outlining China's plan to broaden an iPhone ban for certain government departments, state-backed agencies, and firms as the tech war with the US progressively worsens, Zero Hedge reported.

Beijing plans to broaden iPhone restrictions to a number of state-owned companies and other government-affiliated entities, according to Bloomberg, citing sources who requested anonymity due to the delicate nature of the topic.

The report builds on Wednesday's Wall Street Journal story of how iPhone "restrictions are the latest step in Beijing's campaign to reduce reliance on overseas technology.”

“Beijing intends to extend that restriction far more broadly to a plethora of state-owned enterprises and other government-controlled organizations," the people said, as per the report.

Apple shares were down 2.71 per cent during pre-market hours in New York, breaking down below its 100DMA.

Trading action on Wednesday recorded the largest daily loss in a month over the WSJ's report. European chip-makers, including Apple supplier STMicroelectronics NV, also dropped on Thursday, Zero Hedge reported.

It's unclear how many government agencies and state-owned firms were impacted by the new restrictions, but what's clear is that Beijing's campaign to cut reliance on Western technology is full steam ahead -- and could erode Apple's market share in one of its largest markets where 19% of total revenue is derived from, the report said.

The people added state firms or organizations would likely ban Apple devices from the workplace, while others could entirely ban employees from owning these devices.

News of the broadening iPhone ban comes one week after Huawei launched a new smartphone powered by an advanced 7-nanometer processor chip, a sign that Beijing's push to circumvent US efforts to crush its semiconductor industry via sanctions is failing, Zero Hedge reported.

Beijing purging Western devices from government officials at work and critical state-run companies suggests this is a move to revive Huawei's smartphone businesses, it added.