More Chinese agencies and government-backed firms across the country have ordered staff to stop bringing iPhones and other foreign devices to work, setting in motion an unprecedented prohibition that is likely to block Apple and Samsung from parts of the world’s biggest mobile market.
Multiple state firms and government departments across at least eight provinces — including the prosperous coastal area — instructed employees in the past month or two to start carrying local brands, according to people familiar with the matter.
The move marks a major step up from September, when a small number of agencies in Beijing and Tianjin began telling staff to leave foreign devices at home, said the people, who asked not to be identified for discussing confidential orders.
The much broader, coordinated effort marks a dramatic quickening of Beijing’s campaign to wean itself off American technology, coinciding with the resurgent popularity of the homegrown brand Huawei Technologies.
The administration of President Xi Jinping this year decided to expand a ban on foreign devices beyond the most sensitive departments — a directive that had been in place for years — to encompass many more government agencies and even state firms, Bloomberg News reported in September.
While Chinese software and hardware have gradually replaced American products over the years — from Microsoft software to Dell computers and Intel chips — the mobile edict threatens to deal a swift and direct hit to Apple’s market share.
This month, smaller firms and agencies in lower-tier cities have issued their own verbal directives, suggesting a much broader movement is kicking in, the people said.
The orders originated from cities across at least eight provinces from prosperous Zhejiang, Guangdong, Jiangsu and Anhui to northern Shanxi, Shandong, Liaoning and central Hebei — home to the world’s largest iPhone factory.
An Apple spokesperson declined to comment. The State Council Information Office and the Cyberspace Administration of China, which oversees online security, did not respond to faxed requests for comment.
The Chinese government has previously pushed back on reports about iPhone restrictions, while also raising concerns about the security of the device.
“China has not issued laws and regulations to ban the purchase of Apple or foreign brands’ phones,” Foreign Ministry spokeswoman Mao Ning said during a press briefing in September.
Major challenge
It is unclear how many government agencies precisely have issued directives, nor how widespread they have been. Different organisations will likely vary in how zealously they enforce internal edicts, with some forbidding Apple devices from the workplace and others barring their use entirely.
Collectively, however, they present a major challenge for Samsung and Apple, which are both struggling to sustain growth in a key market. For Apple, which also uses China to produce the majority of its devices, the country yields about a fifth of its revenue.
Apple gets the majority of the world’s iPhones from sprawling factories run by suppliers like Foxconn Technology that together employ millions of Chinese.
Chief executive officer Tim Cook was the architect of the company’s strategy to outsource manufacturing to China two decades ago. He has worked hard since to maintain positive ties with Beijing, even as Apple has begun shifting more production capacity to other countries including India.
Independent data has indicated that the iPhone 15 is selling more poorly in the country than the previous model, prompting some analysts to scale back revenue projections.
Analysts believe that part of the slowdown stems from the August release of a Huawei smartphone that contained an advanced made-in-China processor. State media celebrated it as a triumph against US sanctions, while American lawmakers called for an investigation into possible violations of those curbs.
While Apple’s revenue from Greater China fell 2% in the fourth quarter, the company blamed the decline on the iPad and Mac. Cook said the iPhone 15 Pro did well in the region and that is is “very optimistic” about the company’s performance there. Apple still enjoys popularity in China and its devices remain common in both the government and private sector.
Chinese state firms like oil giant PetroChina employ millions and still control vast swaths of a centrally planned economy. The state sector provides jobs for an estimated 80 million people and the figure could have grown by as much as 2 million on a net basis in 2022. Government agencies employ millions more.
Even with US-China ties fraying, the US company is highly dependent on the Asian country — both as a manufacturing partner and a market for its products. Cook celebrated that relationship during a trip to China earlier this year, calling it “symbiotic”.
But the blockade on the devices is the culmination of a years-long effort to root out foreign technology in sensitive environments, and coincides with China’s push to become self-sufficient in critical areas.