What if China bans Apple to retaliate for U.S. sanctions against Huawei, ZTE?

“During Apple’s most recent financial earnings call in February, CEO Tim Cook said that the U.S. company had ‘an all-time record for revenue in mainland China” for its December quarter,’ Jean Baptiste Su writes for Forbes. “Another interesting data point regarding iPhone sales in China that Cook highlighted during the call was that in the increasingly rich urban China, as well as in the US, the top five smartphones for the last quarter of the year were all iPhones.”

“Last year, Apple’s revenue in Greater China (mainland China, Taiwan, Hong-Kong, and Macau) was $46 billion, roughly half of its U.S. business, representing 19% of its total sales for 2017,” Su writes. “However, if the Chinese government decides to ban the sale of Apple products for national security reasons, in retaliation for the implicit ban of Huawei and ZTE in the U.S., Apple could suddenly lose 19% of its revenue and access to the world’s largest consumer market, which would have been a formidable growth-engine for its future. The Cupertino, California-based company will also see its $913 billion market capitalization, as of this writing, melt away and be forced to lay off 10% to 20% of its workforce, representing up to 27,000 employees.”

Su writes, “Four years ago, China already banned government agencies to purchase Apple products for national security reasons so it wouldn’t be too hard to extend it to the rest of the population.”

Read more in the full article here.

MacDailyNews Take: More importantly, what if space aliens arrive and decide to blow up the moon?

SEE ALSO:
Apple CEO Tim Cook heads to China as President Trump orders 25 percent tariffs on up to $60 billion in Chinese imports – March 23, 2018
BoA Merrill Lynch: Apple is prepping a ‘foldable’ iPhone; U.S. and China trade tensions not an issue for Apple – March 23, 2018
Designed in California. Assembled in China. How Apple’s iPhone skews U.S. trade deficit – March 21, 2018
President Trump blocks Broadcom-Qualcomm deal over China concerns – March 13, 2018
Elon Musk sides with President Trump on trade with China – March 8, 2018
Analyst: President Trump’s tariff impact on Apple would be just a ’rounding error’ – March 7, 2018
Apple and other tech firms caught in crossfire as U.S.-China trade war looms – March 7, 2018
Apple Macs caught up in President Trump’s aluminum tariff plan – March 2, 2018
Apple CEO Tim Cook pressured to follow Elon Musk and leave President’s Council over Paris Agreement kerfuffle – June 2, 2017
Apple CEO Cook calls President Trump as Elon Musk threatens to quit White House advisory councils over Paris decision – May 31, 2017

[Thanks to MacDailyNews Reader “David E.” for the heads up.]

20 Comments

        1. The word “communism” or “commie” as you call it comes from the word communal, i.e. the economic and social participation and sharing between citizens in a community. Like Russia, China is anything but that. China is an autocratic dictatorship with strong oligarchy tendencies controlled by a small group of rulers who excessively/inhumanly profit off the labors of many people.

  1. The article did not touch on the next logical consideration, which has to do with Chinese assembly of Apple products and assembly of other electronics.

    If China tries to “close in”, the effects will cause big changes in lots of industries and China may not be the winner.

    1. China would be the winner because Apple’s actually taking up so much production, other companies are being locked out. Remove Apple, and there’s a huge backlog they could start retooling and working on almost immediately. They’d still be humming and Apple would just have to wait. This would be the only situation that should give investors pause.

      1. I have no idea what you’re talking about. Other companies are being locked out? I don’t think so.

        If Apple products got booted, I’d expect Apple to pull out of China based production. But that would NOT end Apple’s relationship with Foxconn, which already has and grows its production facilities outside of China: Criminal Nation. Massive layoffs would ensue in China and the abusive Chinese government would take a couple black eyes and a fat lip. There’d be a both a peasant and upper class revolt against the consequences of no Apple in China. All the Apple IP parasite companies would be crying and sobbing that they’d have no direct access to Apple gear to plagiarize, ad nauseam.

        For over a decade now I’ve been ranting at Apple to Get The Hell Out Of China. Of course we’re now seeing the consequences of Apple diving in, way over their heads, into the consistent criminal behavior that is China’s government and overall culture.

        No doubt, Apple would at this point indeed suffer for dumping China. I wish they’d been smarter in the first place and never bothered with them at all. Compromising one’s ethics for the sake of ¢a$h always has a precipitous downside. It’s a DUH thing. 🙄

        1. That’s quite an optimistic view. If Apple would STILL be doing business in Foxconn, I’m also 100% sure that those subsidiaries in other countries would NOT share that IP with Foxconn in China. They would TOTALLY not have access to Apple’s plans anymore.

          Foxconn makes everything for everyone. That’s a fact. If Apple’s forced to pull out, there wouldn’t be any layoffs because there are more non-Apple products being built than Apple products every single day. This would just mean MORE non-Apple products would be made. Every other company wanting something manufactured would suddenly have a greater likelihood of their products being ready on time with all the newly available capacity.

          1. This would just mean MORE non-Apple products would be made.

            … In China for the Chinese by the Chinese, which has been the plan all along.

            As for all these mysterious products not being made on time because of Apple eating Foxconn manufacturing capacity, again: I have no idea what you’re talking about. Who are these companies that are going to leap in and use abandoned Foxconn manufacturing capacity in China? No, it won’t be any of the Chinese wannabe ‘smart’phone / Android makers. They would require more sales in order to require more manufacturing. As we’ve clearly seen this week, all of them make a meagre profit compared to Apple. That’s not going to change if Apple pulls out of Chinese manufacturing. Then add on the fact that the Chinese ‘smart’phone manufacturers have been intelligently significantly banned in the USA for their lack of security and their affiliation with the China: Criminal Nation government.

            There would be a mess without Apple in China, but the big fat losers would be China, which is as it should be under the circumstances.

            Meanwhile, there’s the Tim Cook factor. Can he be humble enough to change his manufacturing and marketing strategy and pull out of China, as I wish he would?

  2. China needs a big market like America to sell its cheap phone and other manufactured goods. I dont see China targeting Apple in particular as it will have manufacturing and loss of jobs in China

  3. If China is 20% of AAPl sales then I would expect massive layoffs in China if AAPL were banned. Don’t think would be easily absorbed. Is Xi like Trump who cuts off his nose to spite his face?

  4. Yes, and India and Indonesia are parliamentary democracies with democratically elected leaders. China on the other hand is run by an authoritarian leader in a one part state, with minimal human rights and a heavily compromised judiciary.

    Apple talks the talk but maybe they should do a bit walking the walk.

  5. It’s a bad situation for sure. China is one of the biggest markets and growing. We just have to avert long-term consequences.. Trump and Xi and their nation’s current standing are always temporary. Politically and economically is all temporary. That’s the beauty of it all. Nothing remains the same and nothing is permanent. Just have to wade through it and avoid long-term hurt.

  6. if China does not want Apple’s business, Apple could move to Taiwan or other Southest /South Asian countries.

    It is true that China is a big market. But pulling out the US Manufacturing from China will hurt china more. Imagine all the US manufacturing from China is getting pulled out and moved to near by countries… that will have a big impact on china…

    so, it is unlikely

  7. RP,

    Trump is transitory (when is up to disagreement) but China is a different matter. Xi is a leader for as long as he wants.
    This is all about money (and how much can be made in China). The political situation in China isn’t going to change.

    The theory of engagement with China is going to change the country is as fallacious as engagement with Russia is going to change that country.

    Let’s call it for what it is…appeasement, nothing more and nothing less.

    For the record in Australia we have the long hand of China trying to censor what Australian academics are teaching in Australian universities. We have so called Chinese friendship societies trying to control Australian citizens of Chinese descent in our country not just in China.

    China is an authoritarian country that is attempting to control the activities of its neighbours and I don’t give a rat’s rear end which country or company kowtows before Xi and co., it is appeasement and that’s it.

    As far as Apple is concerned the company has taken a stand over human rights – and I support them for that – but they only reach for low hanging fruit (i.e. only in democratic countries). When they come up against countries that abuse human rights they go really quiet and I cannot and will not accept such hypocrisy.

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