Apple shares drop 4% following a report that China has banned iPhone use by officials.

Following a report that China forbade its government officials from using Apple’s iPhones for work, the company’s shares dropped 4% on Wednesday. Beijing is attempting to lessen its reliance on foreign technology and improve cybersecurity.

The Wall Street Journal, which spoke with many people with knowledge of the situation, broke the news of the ban in its initial report.

In light of rising geopolitical tensions with the United States, Chinese President Xi Jinping is implementing the embargo as part of his aim to lessen his nation’s reliance on foreign technology and improve cybersecurity.

Both the private sector and government officials in China are very fond of Apple and its products. For the IT giant, China is a crucial consumer market and a centre of manufacturing.

Through its network of contract manufacturers and suppliers, Apple employs millions of people to produce its key goods, including the iPhone, the bulk of which is produced in China. Sales in the country for the three months that ended on July 1 totaled $15.76 billion, up 8% from the same period last year. China accounts for slightly under one-fifth of the company’s overall revenue.

Similar measures imposed by the American government against Chinese tech firms and apps, such as Huawei and TikTok, are mirrored by the ban.

Since last year, 26 states and the federal government have taken action to limit or outright prohibit the use of TikTok in official buildings. The government organisations argued that the Chinese government might use the software to spy on American residents and get private information.

The Biden administration also contemplated isolating Huawei from American suppliers, though no decision has been made yet.

The government’s investigation of Apple is not new, either domestically or internationally. Regulators in the U.S. and Europe have targeted the corporation, along with other internet behemoths like Amazon (AMZN), Google (GOOGL), Meta Platforms (META), or Microsoft (MSFT), for alleged anticompetitive business practices and monopolistic status.

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