Thursday, September 21, 2023

The iPhone faces an unexpected challenge in China, which wants to ban its use in state agencies and companies

Apple faces a major challenge in one of its key markets. As reported The Wall Street Journal, China wants to ban the use of the iPhone – and any other foreign-brand mobile – to officials of its main state agencies. A case similar to what happened recently in Russia.

With this plan, the authorities of the Asian giant would seek to optimize their cybersecurity systems and, at the same time, deepen their initiative to cut dependence on technologies developed outside the country. But the strategy would be even more ambitious.

In accordance with Bloomberg, China intends to extend the iPhone blockade to companies and other organizations controlled by the government of Xi Jinping. However, the details about the implementation of this veto are still not entirely clear. It is mentioned that the authorities have yet to issue a formal, written ban, while some officials have only been informed of the decision via chat groups.

In some cases, the Chinese ban on the iPhone would affect its use as a work device. However, those who use it as a personal mobile would also have been asked be dropped off at home during work hours. In any case, the aforementioned media affirm that the application of the measure will be as strict as defined by each agency, company or organization affected.

Apple and the possible consequences of the Chinese ban on the iPhone

What does seem a fact is that the ban on the iPhone in China would not be a blow directed especially at Apple, but to the United States. Beijing and Washington have spent years of tension fueled by the trade war. Thus, the attack against the smartphone of those from Cupertino would be a response to the events of recent years. The most important being the veto on Huawei and, a short time ago, the restrictions on NVIDIA and AMD to export their AI chips to the Asian giant.

The blocking of the use of the iPhone in agencies, companies and organizations controlled by the Chinese government could make Apple the scapegoat of a political dispute. The authorities of the Asian giant know better than anyone that those of Cupertino depend almost exclusively on them to manufacture their products.

But not only that. China is one of the main markets for Apple, where the iPhone has become the best-selling mobile in the segment premium. In addition, the company’s revenue in the Greater China region they have tripled in the period between fiscal years 2012 and 2022. They went from 23.8 billion dollars to 74.2 billion dollars, respectively.

It is true that the relationship built with the Asian giant has played a key role in making Apple the most valuable company in the world today. In fact, Tim Cook was a fundamental part of establishing supply chains and production lines for the iPhone and other apple products in the country, during his tenure as chief of operations under Steve Jobs.

The future

If China moves forward with an iPhone ban on its state agencies and companies, Cupertinos may see it as the definitive argument to accelerate their plans to take the manufacture of their devices to other countries. Something that you have already started to do, but that is still part of a very long-term strategy.

As for the possible impact of the ban on mobile sales, today it is difficult to know how the Chinese market will respond. When government and military employees were banned from using Tesla cars, many predicted a collapse in the company’s sales in China. However, this did not happen.

This does not mean that the Chinese ban on the iPhone will not have any kind of effect on its commercial performance. Perhaps it will even serve as a push for local manufacturers such as Huawei and Xiaomi gain market share and put pressure on Apple. But we will have to wait a while before seeing if this can really happen.

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