iPhone Banned In China? Apple Shares Crash Amid Fears It May Lose 20 Percent Of Its Business Revenue

China took a rather drastic decision this week to ban iPhones in the legal, judicial, and administrative departments. This could be a disaster for Apple Inc. as it stands to lose almost a fifth of its business revenue.

Apple iPhones are now banned by China's central administration in a few areas. As expected, investors and Apple Inc. are panicking. Let's look at the immediate repercussions and long-term implications of this radical approach by China to safeguard local smartphone manufacturers.

China Prohibits Using Apple iPhone For Its Officers

China has reportedly ordered its central government employees not to use Apple iPhones. Employees must not even bring their personal iPhone devices into any official premises.

As expected, this news has sent shockwaves among American companies, and Apple Inc. was deeply impacted as its stock price took a steep tumble. Apple shares dropped by more than 3.5 percent in a single trading day, which is the company's largest daily drop in a month.

Apple Inc. shares eventually stabilized at $182.91 in New York. While the 3 percent drop might not seem much, it is an eyesore compared to the 46 percent increase in the Apple stock price this year alone.

China is one of Apple's biggest and most reliable markets. This single country generates nearly a fifth of its total revenue. Moreover, China is important to Apple as it is a manufacturing hub as well. Apple has been trying to move manufacturing to other countries such as India, but the transition is slow.

Why Did China Ban Apple iPhones?

There's no official confirmation from the Chinese government about the ban yet. Some reports suggest the upper management in China's central administration has been informing their juniors verbally instead of issuing any memos.

Multiple sources have indicated China is determined to curb the use of foreign-branded smartphones in the country. In other words, China isn't attempting to address any privacy or security concerns. Instead, the country is countering America's strongarm tactics.

The United States has been taking a tough stand against Chinese technology companies for quite some time now. It appears China is not just retaliating but also steadily reducing its reliance on American companies for cutting-edge technologies. Banning the iOS iPhone could spur demand for Android smartphones from Huawei, ZTE, and other regional smartphone manufacturers.

It is important to note that China hasn't banned Apple iPhones in the entire country. China's government has merely prohibited central government employees from using iPhone smartphones for official work. However, this informal ban could be a precursor to nationwide restrictions on American technologies and products.