Apple (NASDAQ AAPL) is the latest technology company to fall victim to government restrictions in China. The Chinese government has removed ten Apple Inc. NASDAQ:AAPL products from its official government procurement list, including the iPad, iPad Mini, Macbook Air and Macbook Pro.
The full list of exclusions has not yet been released, but will presumably include the iPhone too. Last month Chinese state television aired a report which stated that the iPhone continued to collect user location information, even when positioning settings were turned off. This was enough for the iPhone to be branded a threat to national security.
Apple immediately refuted these reports and claimed: “Apple is deeply committed to protecting the privacy of all our customers. Unlike many companies, our business does not depend on collecting large amounts of personal data about our customers.”
Apple Inc (NASDAQ AAPL): Apple Banned
Despite the Apple statement, officials have indicated that the ban is due to security concerns, and applies to all central Party departments, government ministries and local government. China has stepped up its scrutiny of foreign owned companies in the wake of revelations made by former NSA contractor Edward Snowden concerning the extent of secret US surveillance programs. Tensions between the US and China concerning cyber security mounted after five Chinese officials were prosecuted for allegedly stealing corporate secrets.
Chinese government restrictions reflect a increasing concern for cyber security in our digitized world. The move towards using Chinese national providers began with a ban on the Microsoft Windows 8 operating system, however Dell and HP products are still on the approved list. Some have claimed that the loss of the government procurement market will not unduly affect business, but Mark Po, a Hong Kong-based analyst, said that “when the government stops the procurement of products, it sends a signal to corporates and semi-government bodies.
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It is important to note that Apple (NASDAQ AAPL) has not been singled out. Earlier this week Symantec Corporation (NASDAQ SYMC) and Kaspersky were also removed from the official procurement list, which Chinese companies now dominate.
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