How iPhones Ban In China Led Warren Buffet's Largest Stock Holding, Apple To Lose $200 Billion

The world's largest company in terms of market share, Apple Inc has lost approximately 200 billion dollars in valuation in a span of two days. The stock has been in a free fall since September 5th, nosediving by more than 6%. Apple is Warren Buffett's largest stock holding. The reason behind the sharp selling in Apple is that reports stated that China is planning to expand a ban on the use of iPhones by employees of government-backed agencies and companies.

This has investors worried about Apple's business prospects in the world's second-largest economy, and let's not forget China is also where the American tech giant's most of products are manufactured. Taiwan-based Foxconn is Apple's one of largest and oldest suppliers of products.

Apple Inc listed on Nasdaq ended at $177.56, down by 2.92% on Thursday. However, since September 5th, the stock has plummeted by 6.4%. Apple's weekly drop is over 5.5%. Its market cap is around $2.78 trillion.

It was Wall Street who first reported on Wednesday that Beijing has ordered central government agency officials to not bring iPhones into the office or use them for work. Later in the day, Bloomberg News also stated that the ban may also be imposed on workers at state-owned companies and government-backed agencies.

China's ban is expected to create a hindrance for Apple in its biggest foreign market and global production base. Hence, investors carried panic selling for two consecutive days now and that has resulted in Apple losing around $200 billion of its market value.

Bloomberg also reported that if Beijing's plan goes ahead, it might later erode Apple's position in a market that yields about one-fifth of its revenue, and from where it makes the majority of the world's iPhones through factories that employ millions of Chinese

Also, the development comes ahead of Apple's upcoming launch of the iPhone 15. As per the reports, the launch is expected to take place on September 12.

Last month, Apple reported its quarterly earnings report. The company recorded a slight decline of 1% YoY in its net sales to $81.8 billion in the third quarter of its fiscal 2023, compared to sales of $82.96 billion in Q1 of the previous fiscal. Meanwhile, Apple's net income gradually rose by 2.26% to $19.88 billion in Q3, as against $19.44 billion a year ago same quarter.

On an expected line, iPhone sales dipped by 2.45% to $39.67 billion in Q3 of the current fiscal, compared to $40.67 billion in sales a year ago same quarter. Also, sales of Mac dived by 7.34% YoY to $6.84 billion, while iPad sales plunged by 19.84% YoY to $5.79 billion.

However, on a geographical basis, Apple outperformed in what seemed like its weakest smartphone market, China after a decade. Sales in Greater China jumped by 7.90% YoY to $15.76 billion, while Europe market recorded a rise of 4.76% YoY to $20.21 billion. Sales were down in other markets like America, Japan, and Rest of Asia Pacific.

Warren Buffett who is known as the 'Oracle of Omaha' by the world, holds Apple shares in his portfolio, According to StockCircle data, Warren Buffett acquired 916 Million Apple shares worth $167 Billion. It makes up 49.83% of their stock portfolio and is their biggest holding. The investor owns 5.70% of the outstanding Apple stock. The first Apple trade was made in Q1 2016. Since then Warren Buffett bought shares thirteen more times and sold shares on five occasions. The stake cost the investor $36.3 Billion, netting the investor a gain of 362% so far.