Apple stock dips as China considers probing its App Store practices
Apple shares sunk 3% in premarket trading on Wednesday after Bloomberg reported that China’s antitrust watchdog is considering looking into the iPhone maker’s App Store fees.
Citing people familiar with the matter, Bloomberg reports that China’s State Administration for Market Regulation is interested in examining Apple’s policies, including its blocking of third-party payment services and how much the company charges developers for in-app spending — sales of which Apple often takes a 30% cut on.
Though the regulator hasn’t decided whether to formally open an investigation into Apple yet, it’s a further headache for Apple’s already struggling Chinese business if it does go through: the tech giant has recently been dethroned as the top smartphone seller in China, dropping to the No. 3 spot after local makers Vivo and Huawei.
The threat of a probe also comes at a time when tit-for-tat trade tensions are building up between China and the new Trump administration. The Chinese watchdog also opened an investigation into Google and Intel over an alleged antitrust violation earlier this week.
Wedbush Securities analyst Dan Ives estimates that “Apple gets roughly $5 billion per year annually from China around App Store so it’s less about revenue exposure for investors and more about building US/China tensions with US Big Tech in line for retaliatory shots across the bow.”
Though the regulator hasn’t decided whether to formally open an investigation into Apple yet, it’s a further headache for Apple’s already struggling Chinese business if it does go through: the tech giant has recently been dethroned as the top smartphone seller in China, dropping to the No. 3 spot after local makers Vivo and Huawei.
The threat of a probe also comes at a time when tit-for-tat trade tensions are building up between China and the new Trump administration. The Chinese watchdog also opened an investigation into Google and Intel over an alleged antitrust violation earlier this week.
Wedbush Securities analyst Dan Ives estimates that “Apple gets roughly $5 billion per year annually from China around App Store so it’s less about revenue exposure for investors and more about building US/China tensions with US Big Tech in line for retaliatory shots across the bow.”
