Apple Inc (NASDAQ:AAPL) shares struggled this week in the lead-up to the highly anticipated launch of the iPhone 15 on Tuesday on concerns about the tech titan’s ability to retain its market share in China following the launch of Huawei’s Mate 60 smartphone and reports that the country has banned the use of iPhones for work purposes by state employees.
Shares of the tech titan have shed about 5% since the market open on Tuesday, the first trading day this week following the Labor Day long weekend, closing at about US$178 on Friday.
Spurring the sell-off of Apple stock this week was the launch of Huawei’s Mate 60 phone on concerns this poses a risk to Apple’s 19% share in the Chinese smartphone market.
China has gained a greater share, up from 11% in 2020, as Huawei simultaneously lost traction due to U.S. sanctions, falling from 27% to 11%.
Extending falls in Apple’s stock on Wednesday was a report by the Wall Street Journal that China has banned government employees from using iPhones at work.
“The Nasdaq is sinking as one bad Apple spoils a bunch of mega-cap tech stocks Apple's growth story is heavily reliant on China,” OANDA senior market analyst Edward Moya commented.
“An intensified Beijing crackdown could pose a significant problem for other mega-cap tech firms reliant on China."
Analysts at Wedbush, however, weren’t concerned.
“Any China government agency iPhone ban is way overblown,” they wrote in a note to clients. “To quantify, its less than 500,000 iPhones of roughly 45 million we expect to be sold in China over the next 12 months.”
Contact the author at emily.jarvie@proactiveinvestors.com
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