Huawei's torment in the US could be about to backfire, dealing a stinging blow to Apple
- The Trump administration's decision to blacklist 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 warned that the moves against Huawei are "a risk for Apple and the supply chain."
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Huawei has had 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.Advertisement
"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."
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, editor-in-chief of the state-owned Global Times newspaper, is one iPhone user who is switching to Huawei because the Chinese firm is being "unreasonably suppressed" by the US government.In a tweet explaining the decision, he added that he does 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 added.Advertisement
This was echoed by Bryan Ma, vice president of client devices research at research firm IDC Asia Pacific. He told the South China Morning Post: "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."
But even a small swing in sentiment against Apple could be hugely damaging for the company. Apple issued a disastrous earnings warning in January, in which it warned that holiday quarter revenue would be more than 7.6% lower than it expected - in large part due to a shortfall in sales in China.Apple's fortunes improved in China in the first three months of 2019, with CEO Tim Cook highlighting the "improved trade dialog between the United States and China" on an earnings call last month.Advertisement
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