Apple saw its shares tumble by nearly 4 per cent on Thursday, marking its most substantial one-day drop in over a month. The catalyst for this sharp decline was the emergence of reports indicating that China had extended restrictions on the use of iPhones by government personnel.
The move sent shockwaves through the tech industry and raised concerns about escalating tensions between the United States and China.
Apple’s stock, a bellwether for the technology sector and a crucial component of major stock indexes, was poised to lose an estimated USD 100 billion in market value as a result of the downturn. This significant market capitalisation loss underscores the far-reaching impact of the company’s share price fluctuations.
The ramifications of Apple’s decline rippled through the tech industry, affecting companies with substantial exposure to the Chinese market. Among those affected were suppliers and tech giants like Broadcom, Qualcomm, and Texas Instruments, all of which saw their stock prices drop by varying degrees, ranging from 1.4 per cent to 4.7 per cent.
The reports that rattled the market disclosed that Beijing had recently instructed employees at select central government agencies to cease using Apple mobile devices while at work. This development deepened fears regarding the economic toll of the rising tensions between the two global superpowers.
In recent years, the United States has implemented restrictions on China’s access to critical technologies, including advanced semiconductor chips, while China has taken steps to reduce its dependence on American technology products. Notably, US aerospace giant Boeing has also faced curbs on its operations in China.