Apple Shares Slide After China's iPhone Ban

Facts

Apple shares have fallen by over 6% since Wednesday following reports that the PRC has prohibited government employees from using iPhones.¹
The technology giant has consequently lost nearly $200B in stock market valuation. Apple reportedly sells about 50M iPhones in China annually, and the ban could bring it to 5-10M units annually.²
In 2022, while iPhone sales in China generated $74B — nearly a fifth of Apple's revenue — the ban could affect its global supply chain as the country is a manufacturing hub for almost all Apple devices.³
Meanwhile, in Taipei, Largan Precision, which makes iPhone camera lenses, dropped more than 4%. Contract chipmaker TSMC fell 0.6% on Friday.⁴
The news comes as Chinese telecommunication giant Huawei launched two new smartphones, with analysts predicting its smartphone sales to see a jump of 65% to 38M in 2023.⁵
Last year, the US banned federally funded US tech firms from building advanced facilities in China for a decade, as well as prohibited companies from supplying state-of-the-art chips or chipmaking equipment to China.⁶

Narrative A, as provided by Investopedia. The PRC's ban on iPhones will likely have little impact on the tens of millions of smartphones expected to be sold in China next year. Private sector demand will more than make up for the public sector restriction as Apple is ready to unveil its newest models — the iPhone 15 and iPhone 15 Pro — next week.
Narrative B, as provided by The sydney morning herald. Apple is finding itself in a tricky situation as China continues to encourage domestic technology manufacturers' growth and reduce foreign companies' influence amid heightened Beijing-Washington tensions. The ban reflects Apple's vulnerability in the Chinese market.