Apple unlikely to feel much heat from China ban: Citi
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Forget the China chatter on Apple, Inc. (NASDAQ:AAPL).
The proposed ban on government employees using iPhones will barely move the needle, Citi said. Most of the countryâs sales are made to consumers rather than to commercial entities, and government purchases are less than 1% of total iPhone revenue in China.
Plus, the âbanâ on government employees owning AAPL products has yet to be formalized and even if it is, it's unlikely to have a material impact, the firm said, noting that China put out a similar ban on government-owned PCs about a year ago and that hasnât had a material impact.
Shares are down 0.8% on Tuesday.
Experts donât expect the ban to extend to consumers in China and donât expect it to impact Appleâs volume significantly, Citi analysts led by Atif Malik wrote in a note.
Additionally, AAPL is benefiting from increasing premiumization globally, largely thanks to financing programs.
âWhen spreading a few hundred dollars over the 24/36 months financing period, a few more dollars per month wouldnât likely make a big different to consumers so they are jumping price bands,â the analysts said. âPremium phones are ~26% of total smartphone sales now, compared to 19% in 2019. Apple takes 70% in premium market in 2022, compared with 61% in 2019.â
AAPLâs market share in China has also doubled to about 17% in the first half of 2023 from 9% in 2019.
AAPLâs Wonderlust event will be held later on Tuesday.

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