The Huawei arrest puts a 'bullseye' on Apple's back at a potentially dangerous time for iPhone sales in China

JASON REDMOND/AFP/Getty ImagesA protester holds a pro-Huawei sign outside the bail hearing for Huawei Chief Financial Officer Meng Wanzhou.
  • Apple must feel like it has a “bullseye” on its back after the arrest of Huawei CFO Meng Wanzhou, analyst Dan Ives told the BBC.
  • He said the arrest is likely to further stoke rivalry between the US and China, from which Apple could end up feeling the backlash.
  • This comes at a dangerous time for Apple. Goldman Sachs said last month that Apple is facing “demand risk” in China.

Apple must feel like it has a “bullseye” on its back following the arrest of Huawei CFO Meng Wanzhou, an Apple bull told the BBC.

Dan Ives, from investment firm Wedbush, said the arrest of the tech giant’s CFO in Canada at the behest of the US is “the straw that could break the camel’s back,” as it could stoke rivalry between China and the US, which in turn could affect Apple’s Chinese sales.

China has long been at odds with the US over Huawei, which recently surpassed Apple to become the world’s second-largest phone manufacturer behind Samsung.

Read more:
China says the US is acting like a “despicable rogue” over the arrest of Huawei’s CFO

Huawei is effectively locked out of the US market, and Washington has lobbied allies to similarly limit Huawei’s growth. Australia and New Zealand have already blocked Huawei from expanding its upcoming 5G network.

Ives believes that the Huawei arrest could provoke China to retaliate. “The last thing tech investors wanted to see was this news about the CFO of Huawei,” he told the BBC.

This comes at a potentially precarious time for Apple in China. Analysts at Goldman Sachs said in November that Apple could see “demand risk” in China during December and beyond. Citic Securities, a Chinese investment bank, added that iPhone sales “may decline by high single digits.” This was despite Apple’s revenue from China growing 16% year-on-year to $US11.4 billion in Q4.

But Ives pointed out that Apple does have some security, as it manufactures many of its phones in China.

Business Insider contacted Apple for comment.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.