With shares plummeting 2.9% on September 7th alone, Apple stocks are bleeding as they have collectively lost $200 million in 48 hours. With the 6th providing the worst daily loss in over a month, the already troubled electronics giant is now the worst-performing member of the Dow Jones Industrial Average.
The root of the problem is Apple’s inability to continue business with the government of the second largest economy on the planet – China. As also the HQ for much of their product production and development, this represents a major problem for the company. While Apple fails to disclose by country phone sales figures, China is their largest foreign market and represents roughly 1/5 of their total revenue in 2022.
Based in Cupertino, California, the company has become so entrenched in the Chinese economy that they are widely considered above the law and beyond the reach of Chinese governmental restrictions. First reported on September 6th by the Wall Street Journal, China has banned the use of the iPhone by top-level Government officials. Managers trickled down the message via chats, as well as in meetings.
An interesting side note is the emergence of a new phone by competitor and Chinese manufacturer Huawei. National Security Adviser Jake Sullivan spoke to the press about the release on the 6th. He claimed the United States needs to gather “more information about precisely its character and composition.” Doing so, they hope to learn if they violated any US restrictions on semiconductor exports in the development of their new chips.
Making a decision like this sends a message to the Apple corporation that they should have realized long ago when they shipped business over there; they will take as much as they can and then throw the company to their side once they figure out how to pirate a knockoff or similarly useful product. With the Chinese Communist Party (CCP), there is no limit to how far they will go to keep themselves happy and everyone else miserable.
Like companies who got involved with the mob or the unions when it came time to do business, they quickly learned that they were there just if they were useful and no longer. Much the same, Apple is being cast aside by the CCP as quickly as they can replace them with a Chinese-exclusive product.
This kind of nationalism is something Americans used to have. We were proud to buy American made because it meant that we were buying the best. As a nation, we had everything we needed, and if it didn’t exist, we had companies who could find a way to make it happen. Suddenly third-world nations offered to open their factories, and fully staffed, they could save enormous amounts over using American labor. Even when shipping was factored in, these deals were no-brainers.
Unfortunately, the child labor force has been kept in high demand through these practices, and they are situations many Americans will gladly turn a blind eye to save a few bucks or get a better piece of equipment made. This is no surprise, nor should it amaze people that the Chinese and others would raise prices once long-term deals were stuck and millions of equipment put in place. They would hold them at gunpoint (so to speak) and demand more.
They got it too, and the American industrial complex only suffered even more as a result.
With Apple falling like this, only time will tell if other companies will follow suit. Given the relationships many of these companies have overseas, it won’t surprise anyone if things continue to get more strained and difficult in the coming months. Hopefully, other American-based companies have the backbone and the foresight to bring manufacturing back over here. If we want any chance of saving the nation, that needs to happen sooner than later.