Apple Faces Antitrust Scrutiny in China; Stock Reacts
Apple (AAPL) shares declined premarket Wednesday following reports that China's government is considering an antitrust probe into the company's App Store policies and fees.
Key Points:
* Bloomberg reported that Chinese officials have been engaging with Apple executives and developers since last year.
* The investigation may not proceed if ongoing talks prove successful.
* News follows the announcement of a US antitrust probe into Google (GOOG, GOOGL), amid escalating trade tensions between the US and China.
* Apple heavily relies on its manufacturing partner Foxconn in China, but has been diversifying its supply chain to India and Vietnam.
* Apple's revenue from China declined 11% in the recent quarter, partly due to lower inventory.
* CEO Tim Cook expects revenue to recover if the country approves the rollout of Apple Intelligence.
* Apple is reportedly in discussions with ByteDance and Tencent (TCEHY) to integrate AI features into iPhones sold in China.
* Apple faces antitrust scrutiny not only in China but also in the US and EU.