Apple among U.S. companies facing ‘informal boycott’ in China | Cult of Mac

Apple among U.S. companies facing ‘informal boycott’ in China


iPhone sales are finally rebounding in China
Chinese customers are hankering after local products.
Photo: Tim Cook/Weibo

There’s no doubt that the iPhone is facing problems in China, but the extent to which this is specific to Apple is up for question.

While Tim Cook blames things like the burgeoning trade war between China and the U.S., analysts at Bank of America Merrill Lynch think Apple may be experiencing an “informal boycott” of its products.

According to a Bloomberg report, Apple sales are suffering “from a general redirection of Chinese demand away from U.S. products.” This would be in line with another report published recently, suggesting that some businesses are penalizing employees for using U.S. products such as the iPhone.

While it doesn’t sound like this is a formal movement (or one targeted specifically at Apple), it does have the potential to substantially impact the company. Apple’s continued growth has been increasingly centered around China. Tim Cook has talked about how Apple products are designed with the Chinese audience in mind.

However, Apple is still associated with the U.S. — not least through its “Designed by Apple in California” ethos. As Chinese consumers flock around local brands, such as Huawei, a shift among aspirational consumers away from wanting Western products such as the iPhone poses a big threat for Apple.

Challenges in China

Bank of America Merrill Lynch economists Ethan Harris and Aditya Bhave also note that:

“According to a survey conducted by our colleagues in equity research, consumers in China and India are showing less interest in upgrading to an iPhone and more interest in upgrading to Xiaomi and Samsung.”

Concerns about the long-term viability of the Chinese market aren’t new. In 2016, activist investor Carl Icahn got out of the Apple investing business because of concerns about China. This was despite making over $3.4 billion investing in Apple in a relatively short time.

Tim Cook has denied a consumer backlash against Apple in China. During a recent interview with CNBC, Cook said that, “There are reports, sort of sporadic reports, about somebody talking about not buying our products because we’re American, maybe a little bit on social media, maybe a guy standing in front of a store or something. My personal sense is that this is small.”