Apple's stock experienced a 2.9% decline, driven by reports of China's intention to expand its prohibition of iPhones within government-affiliated entities and corporations. Concerns are rising among investors regarding the prospects of the world's most valuable public company to conduct business in the planet's second-largest economy. Apple (AAPL) recorded its most substantial daily drop in over a month on Wednesday, witnessing a loss of approximately $200 billion in just two days. As it stands, its stock is currently the poorest performer within the Dow Jones Industrial Average. These bans could signal a troubling outlook for Apple. China constitutes the largest foreign market for Apple's product offerings, with Chinese sales accounting for approximately a fifth of the company's total revenue last year. While Apple does not disclose iPhone sales by specific countries, research firm TechInsights suggests that in the last quarter, there were more iPhone sales in China compared to the United States.
Additionally, Apple manufactures the majority of its iPhones in Chinese factories. Analysts from Bank of America noted in a recent report that the potential iPhone ban coincides with the release of a new high-end flagship smartphone by Chinese manufacturer Huawei. The timing, according to analysts, is noteworthy. The U.S. government announced on Tuesday that it is launching an investigation into the new smartphone. National Security Adviser Jake Sullivan, during a White House press briefing, stated that the United States requires "further information about its precise characteristics and components" to assess whether any parties circumvented American restrictions on semiconductor exports to create the new chip. Tech companies witnessed a decline in response to this news, with the Nasdaq Composite experiencing a drop of approximately 0.9% on Thursday, while the semiconductor sector saw a decrease of more than 2%.
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