China widens ban on officials using iPhones but isn't enforcing it
Continuing reports about the Chinese government banning its staff from using iPhones say that more officials are being told to swap, but in an inconsistent and not enforced plan.
iPhone 14
On Wednesday, China officially mandated that its central government staff could no longer use Apple's iPhone, nor bring iPhones into the build. Said to be because of security concerns, it's believed to be more a retaliation in ongoing US/Chinese relations.
According to Reuters, previous reports that the ban is being extended to state-owned businesses are correct, yet the implementation of the mandate is only half-heartedly being enforced.
While sources in at least three ministries and government bodies confirmed the ban, one source said they had not been given a deadline to comply. Another source in one of the ministries affected reported have had no such order, and that he or she was currently continuing to use an iPhone.
The yet another source, this time from a regulatory body, told Reuters that staff had not been told to cease using iPhones. They were, though, told that they would be held responsible should any issues arise because of their iPhone use.
While that all suggests that the latest moves by the Chinese government are patchy at best, they are also not the only moves to ban the iPhone. A fifth source, from another regulator, told Reuters that senior staff had been required to swap iPhones for locally-made alternatives such a Huawei -- two years ago.
Three years ago, China's Foreign Ministry representative Lijian Zhao said that the Chinese would have no reason to keep using iPhones of the then threatened US ban on WeChat went ahead. WeChat then was banned in January 2021, but the ban was lifted six months later.
Reports of a Chinese government ban on iPhones have been enough to make Apple's shares drop almost 3% down in premarket trading on Thursday.
The thinking behind that drop may be that China represents an important market for Apple, with around 19% of its earnings coming from the country. However, the ban solely affects government use, which is a minuscule fraction of that 19%.
Unsurprisingly, the majority of iPhones sold in China are bought by the general public. And sales to the public are only growing.
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Comments
Don't lose sight of context.
This is a tit-for-tat move following on from US actions from six years ago and continued to the present day. They've shown enormous restraint so far.
Moving out would make things worse. Where would they go? How much would it cost? And if they did do that, there really would be little to no reason for China not to do what the US did to Huawei. Prevent it operating in one the largest markets on the planet.
As a shareholder, what do you think about losing that entire 19% of earnings instead of a fraction of it?
Did Tesla pull out of China when the CCP banned Teslas, with their eight cameras, from government installations? No, nor should they have.
I lived in Vietnam for six months a few years ago, long enough to learn that drone use is highly restricted, as is taking any video of airports, military installations and even government buildings.
Apple losing China would effectively give direct and powerful competitors a massive boost in hardware, software and services. Things would get amazingly tough for Apple when those companies competed with it outside China using the fruits of that advantage.