- The Trump administration’s decision to blacklist the Chinese tech firm Huawei could have an unintended victim: Apple.
- Chinese citizens are calling for an Apple boycott on social media, which could represent a threat to Apple’s already fragile iPhone sales in the country.
- UBS has warned that the moves against Huawei are “a risk for Apple and the supply chain.”
- Visit Business Insider’s homepage for more stories.
Huawei has had a tortuous few days after being blacklisted in the US. But now people are worrying that the treatment of the Chinese tech firm could backfire on one of America’s great corporate success stories.
Apple could well fall victim to a retaliatory movement in China. There are signs that Chinese citizens are prepared to turn their back on the company, and analysts are predicting that fragile iPhone sales in the country could take another battering.
UBS circulated a note to clients on Wednesday spelling out the risk to Apple if the tide of national opinion turned against the company over the US treatment of Huawei.
“At times, foreign consumer goods have been negatively impacted in China by nationalist sentiment (which social media potentially exacerbating this),” UBS said.
“This could have been a factor regarding Apple iPhone’s poorer performance in China in 4Q18. Whilst hard to quantify, we do view this as a risk for Apple and the supply chain.”
Business Insider reported last week on the “intense discussion” on Chinese social media about US President Donald Trump’s moves against Huawei. BuzzFeed News also said users of the microblogging site Weibo had been calling for a boycott of Apple products.
It’s not the first time the threat of an Apple boycott has been floated. Chinese citizens and companies promised to shun Apple goods following the arrest of Huawei CFO Meng Wanzhou in December.
The Nikkei Asian Review reported at the time that some Chinese firms were even threatening to confiscate iPhones from their employees and punish those who bought them.
Hu Xijin, the editor-in-chief of the state-owned Global Times newspaper, says he is switching to Huawei from an iPhone because the Chinese firm is being “unreasonably suppressed” by the US government.
In a tweet explaining the decision, he added that he did not support a boycott, however. “There are many loyal users of iPhone in China and I believe they are free to decide the brand of cell phone they use,” Hu said.
This was echoed by Bryan Ma, the vice president of client devices research at the research firm IDC Asia-Pacific. “There will be some who are nationalistic and say no to American products, but there are many other users to whom it does not matter as much,”he told the South China Morning Post.
But even a small swing in sentiment against Apple could be hugely damaging for the company. Apple surprised observers in January with a disastrous earnings warning in which it said holiday-quarter revenue would be more than 7.6% lower than it had expected – in large part because of a shortfall in sales in China.
Apple’s fortunes improved in China in the first three months of 2019, with CEO Tim Cook highlighting on an earnings call last month what he called the “improved trade dialog between the United States and China.”
But relations between the US and China have taken a dramatic turn for the worse since then, and Apple could again be caught in the crosshairs.
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