Apple Inc. (AAPL) Expelled from China’s Procurement List


Chinese government has excluded Apple Inc. (NASDAQ:AAPL) from its official procurement list. Bloomberg reported that the official procurement list finalized by the Chinese government in July did not have Apple Inc. (NASDAQ:AAPL) products like the iPad, iPad Mini, MacBook Air and MacBook Pro.

These products were on the procurement list adopted by the National Development and Reform Commission and Ministry of Finance in June this year. Apple Inc. (NASDAQ:AAPL) is not the first technology company to be excluded by the Chinese government from the procurement lists.

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Prior to Apple Inc. (NASDAQ:AAPL), the Chinese government ordered its government departments to stop buying antivirus products from companies like Symantec Corp. and Kaspersky Lab. The latest procurement list, however, includes Dell Inc. (NASDAQ:DELL) and Hewlett-Packard Company (NYSE:HPQ).

The latest step by the Chinese government is perceived as another attempt to pave the way for the emerging Chinese competitors of Apple like Xiaomi and to deplete the market gained by Apple Inc. (NASDAQ:AAPL). According to Bloomberg, the Chinese government motivated Apple Inc. (NASDAQ:AAPL)’s expulsion from the procurement list by saying that this step was taken for security reasons. Recently, Microsoft Corporation (NASDAQ:MSFT) was also shut out of a government purchase of energy-efficient computers.

“When the government stops the procurement of products, it sends a signal to corporates and semi-government bodies. […] The Chinese government wants to make sure that overseas companies shouldn’t have too much influence in China,” Bloomberg quoted Mark Po, an analyst with UOB Kay Hian Ltd. in Hong Kong, as saying.

Apple Inc. (NASDAQ:AAPL) will certainly face some problems in China because of this decision. It already has a competitor, Xiaomi, to tackle on the Chinese market and government policies are making it more difficult for Apple Inc. (NASDAQ:AAPL) to sustain or increase its sales in the region.

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