In just two days, Apple incurred losses of approximately $200 billion, currently making it the worst-performing stock in the Dow Jones Industrial Average, CNN reported. The losses come after the tech giant’s shares plummeted by 2.9% on Thursday following reports that China intends to expand its ban on iPhones to include government-backed entities and corporations.
On Wednesday, The Wall Street Journal reported that China issued a directive order in recent weeks, telling officials at central government agencies to refrain from using Apple iPhones and other foreign-branded devices for work or bringing them into the office, part of a broader effort to reduce reliance on foreign technology and enhance cybersecurity.
One day later, news broke that the government bans would be extended to government-backed agencies and state companies such as oil firm PetroChina, which employs millions of workers, Bloomberg reported.
The stock drop signals that investors may be concerned about Apple’s ability to operate effectively in China, the world’s second-largest economy, CNN added. The bans are particularly worrisome for Apple since China is its largest foreign market, and accounted for about one-fifth of its total revenue last year, according to an SEC filing.
Analysts at Bank of America noted that the possibility of an iPhone ban coincides with the launch of a new top-tier flagship smartphone by the Chinese manufacturer Huawei, describing the timing as “interesting,” per CNN.
The new smartphone is also under investigation by the U.S. government to discern whether it found a way around American rules on exporting to create the new chip, with national security adviser Jake Sullivan saying in a press briefing on Tuesday that the U.S. needs “more information about precisely its character and composition.”