China Bans Civil Servants from Using iPhones, Apple Sales Will Fall Tech – 1 day ago

Jakarta, CNBC Indonesia – iPhone sales could drop by up to 10 million units due to Chinese government action. The Chinese government recently reportedly banned Chinese civil servants from using iPhones while working.

Analysts on Wall Street said the ban in China would impact Apple’s sales, revenue and profits.

Erik W. Woodring, an analyst at Morgan Stanley, said the fall in Apple shares was “exaggerated.” He estimated that, in a worst-case scenario, Apple’s revenue would fall 4 percent due to the ban in China. Meanwhile, Apple’s profits could decline by 3 percent.

Apple shares fell 6.4 percent in the last two days, causing the iPhone and Macbook maker’s market capitalization to shrink by US$ 190 billion. Investors flocked to sell Apple shares after hearing news of a ban on Chinese government employees from using iPhones.

“China is a determining factor in Apple’s success, but Apple is also an important element of China’s economy. Although there is potential for Apple and China to separate in a multi-polar world, we do not believe this news can make the worst case scenario happen,” said Woodring.

BofA Global Research estimates that iPhone sales will hit iPhone sales by 5 million to 10 million units if China really forces its civil servants to replace iPhones. The impact on sales would be even worse if iPhones were banned from being brought to all Chinese government offices.

Beijing’s decision to ban Apple coincided with the appearance of Huawei’s new cellphone, the Mate 60 Pro 5G. Analysts stated that the United States government’s sanctions on Huawei, which have been in place since May 2019, are one of the factors in Apple’s strong sales performance in China.

Since Huawei was sanctioned and it was difficult to get the latest technology to produce premium cellphones, iPhone distribution in China has increased, causing Apple’s market share to increase significantly.

JP Morgan stated that the ban in China would make it difficult for Apple to increase its market share in China. BofA’s estimate is that Apple’s earnings per share fell US$ 0.11 to US$ 0.34 due to the ban in China.

[Gambas:Video CNBC]

(dem/dem)