China has banned the use of iPhones for central government officials, citing unnamed people familiar with the matter.
Shares in Apple tumbled 3.6% on Wednesday following the news, closing at $182.91 in New York. It marked the biggest daily drop in a month. Before Wednesday, Apple had risen 46% this year.
The WSJ reports that managers have been notifying staff of the ban via chat groups or meetings.
CNN has reached out to China’s Ministry of Foreign Affairs and Apple (AAPL), but has not received a response.
A source who regularly deals with Chinese central government agencies told CNN that Chinese officials had already been following an unwritten rule of shunning iPhones since before the pandemic despite the apparent absence of a formal policy. The source asked not to be named due to the sensitivity of the subject.
The source added that central government officials now tend to use smartphones made by major domestic companies, especially Huawei.
In June 2022, some Chinese government ministries had banned Teslas from entering their premises over security fears.
Apple CEO Tim Cook made a high profile visit to the country in March. China is a significant market and manufacturing center for the company, accounting for around 19% of its overall revenue.
The iPhone ban for government officials may be retaliation for similar moves made by the United States against Chinese tech and could have a chilling effect on Apple and other large foreign brands with an established China presence.
China’s Huawei and ZTE have long been subject to US restrictions. And in November 2022, the Biden administration banned approvals of new telecommunications equipment from both companies because they pose “an unacceptable risk” to US national security.
TikTok has also been banned from devices issued by multiple US institutions, including the House of Representatives, the City of New York, Montana, New Jersey, Ohio, Texas and Georgia, over concerns that the Chinese government could have access to users’ data through its Chinese parent company, Bytedance.