- China expanded iPhone restrictions, ordering more state employees to avoid using Apple devices.
- This exacerbates Apple’s reliance on Chinese manufacturing and sales amid geopolitics and competition.
- With 20% of revenue from China, an accelerating iPhone crackdown poses an existential crisis for Apple.
China is reportedly expanding its crackdown on iPhones, with staff in state firms and agencies across 8 provinces newly ordered to avoid bringing Apple devices to work.
Sources tell Bloomberg the directive extends an existing central government iPhone ban to smaller provincial bodies in the latest blow to Apple’s critical China presence. It follows an online discussion of Chinese workers preemptively ditching iPhones in anticipation of more workplace prohibitions.
Geopolitical Tensions and Local Competition
Beijing previously denied limiting iPhone use but questions device security amidst a push to cut reliance on Western technology.
Huawei’s new Mate 60 handset also outsold Apple’s iPhone 15 monthly by nearly 2-to-1 ratios in China.
Apple remains deeply reliant on Chinese manufacturing and the vast smartphone market, now squeezed between geopolitics and ascendant local rivals.
CEO Tim Cook made peace-brokering trips to China this year as Apple complies with app store rules.
Apple’s Existential Crisis in China
However, expanded device crackdowns jeopardize the company’s delicate position and billions in sales in China. Despite supply chain localization efforts, over 95% of Apple products are still made in China.
With the vital market driving almost 20% of total company revenues, analysts expect manifold impacts if an iPhone exodus accelerates alongside Huawei’s resurgence.
Apple is staying silent on the reported expansion of employee iPhone restrictions across China. But being forcibly weaned off its devices poses an existential crisis.
The deepening smartphone crackdown compounds swirling economic and political headwinds as Apple tries to cling to China’s vast reach and production capabilities.
And China’s uncompromising stance leaves the tech giant caught in the middle with no easy solutions. Unless Cook pulls off an improbable peace deal, Apple faces slow decoupling from its Chinese lifeline at tremendous cost.
