Apple (AAPL) shares dumped on the news of an iPhone ban from the Chinese government, and a bearish close this week could add to the pain.
AAPL: Weekly Chart
The price of Apple shares dropped to $177 this week in line with a drop in the Nasdaq, but there is a risk of further losses with support at $170 and under $150.
Apple stock slumped after China was reported to have banned officials at central government agencies from using or bringing iPhones into the office. The Wall Street Journal said that Chinese officials were given instructions by their superiors in workplace chat groups or meetings. The news was another weight on the US indices, with Apple shares falling 3% near the close and the Nasdaq down 0.70%.
Analysts said on Wednesday that the latest from Beijing showed they were not willing to give any freedom to US companies as the country pushes to reduce its dependence on American technology.
“Even Apple is not immune… in China, where it employs hundreds of thousands, if not more than a million workers, to assemble its products through its relationship with Foxconn,” DA Davidson analysts said.
This “should inspire companies to diversify both their supply chains and customer concentrations to be less dependent on China in the event the tensions get worse”.
The latest ban could escalate concerns among foreign companies operating in China as tensions between the US and China continue. The WSJ report did not name any other smartphone makers in the ban, and China’s State Council Information Office did not immediately respond to Reuters’ requests for comment.
China’s latest restriction is similar to the US efforts to ban Huawei and TikTok. Investors should be wary of the implications of further bans, and a weekly close below $182 could mean further losses for AAPL.
