Apple has seen about $200 billion. (£160bn) wipe out its value after China widens its limits on iPhone use by government workers.
Shares in the tech giant have fallen 6.4% over the past two days in response to Beijing ordering some government employees to stop using the devices.
The move has fueled the fear Apple and its suppliers could pay a commercial price for continued tensions between them U.S and China and increasing competition from the rival Huaweiwhich has just launched two new smartphones.
The move comes just days before Apple is expected to do so launch its new iPhone 15.
And it signals a comeback by China’s “national champion” after Huawei’s smartphone business suffered a setback when the firm was placed on a trade blacklist over national security concerns in 2019.
It has been reported that government officials and state-owned enterprises have been ordered not to use iPhones or other foreign telephones.
An employee of an affected company told the Reuters news agency that the ban had also been extended to visitors.
The source said the company paid staff up to 200 yuan (£22) to switch to local brands.
While the number of government employees is not public, Bank of America estimated that such a ban could reduce iPhone sales by up to 10 million a year from China’s annual total of about 50 million.
By contrast, Huawei’s smartphone sales, driven by the new Mate 60 Pro, could jump 65% this year to 38 million, absent some “non-commercial risks”, said Ming-Chi Kuo, an analyst at TF International Securities.
Victoria Scholar of Interactive Investor, a UK investment platform, said: “Beijing is looking to reduce its reliance on US technology, but this (ban) appears to be a significant headwind for Apple as China is its largest international market, accounting for around 20% of its income.”
Asked about the ban at a daily briefing in Beijing, Chinese Foreign Ministry spokesman Mao Ning said “products and services from any country are welcome to enter the Chinese market as long as they comply with Chinese laws and regulations.” .
Several Wall Street analysts said the curbs show that even a company with good relations with the government and a large presence in the world’s second-largest economy was not immune to friction between the two nations.
These have increased in recent years as Washington has sought to limit China’s access to key advances, including cutting-edge chip technology, while Beijing looks to reduce reliance on American technology.
The US Commerce Department is seeking more information about the “nature and composition” of the new chip in the Mate 60 Pro, which some believe could not have been produced without banned US technology.