Apple shares have crashed with $298 billion wiped off the market value of the big US Company who are facing slowing demand for their iPhones and services.
The biggest problem is China where the Communist Government has moved to ban iPhones being used by government-backed agencies and state-run companies and that includes many who operate in Australia.
The latest sign of trouble emerged after reports that China plans to expand a ban on the use of iPhones. This spooked Wall Street and investors who immediately started dumping the stock.
Also hit off the back of the iPhone ban was Qualcomm and Skyworks Solutions.
Bloomberg claims that the fall has come at the worst possible time for fund managers who recently turned bullish on mega cap tech stock such as Apple.
Questions are also being asked as to whether consumers will buy the new iPhone 15 or stay with what they already have with many citing little if anything new in the new model due next week.
Apple closed down 2.9 per cent to $US177.56, bringing its two-day slump to about 6.5 per cent.
Adding to Apple’s troubles are rising US Treasury yields as bonds sell off on worries the Federal Reserve will have to step up its fight against inflation as the US economy remains resilient.
The news is having a widespread effect on the markets, with investors selling everything from chips, mega-cap technology to US-listed Chinese stocks.
“The Nasdaq is sinking as one bad Apple spoils a bunch of mega-cap tech stocks,” said Edward Moya, senior market analyst at OANDA.
“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 analyst Tom Forte said.
This “should inspire companies to diversify both their supply chain and customer concentrations to be less dependent on China in the event the tensions get worse”.
The ban could trigger concerns among foreign companies operating in China as Sino-US tensions escalate and comes ahead of an Apple event next week that analysts believe will be about launching a new line of iPhones.
The WSJ report did not name other phone-makers besides Apple. Apple and China’s State Council Information Office, which handles media queries on behalf of the Chinese government, did not immediately respond to Reuters’ requests for comment.
Bank of America analyst Wamsi Mohan notes that the “timing of the potential ban is interesting” given the recent launch of Huawei’s high-end 5G-capable smartphone.
The teardown of the new device shows that Beijing seems to be making early progress in a nationwide push to circumvent US efforts to contain its ascent, with Huawei’s Mate 60 Pro being powered by Semiconductor Manufacturing International’s 7nm chips, according to an analysis that TechInsights conducted for Bloomberg News.
