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Apple Inc.’s iMovie and iBooks services on the iTunes Store have abruptly gone dark in China amid government pressure just six months after they were launched there.
China is Apple’s second-largest market by revenue, and the shutdown could augur ominously for the Cupertino, Calif. company’s relationships in Beijing.
Although the regulation of China’s tech sector is notoriously protectionist — both Google and Facebook’s services are blocked in the country — Apple has succeeded in carving out a considerable market share for its iPhones and services, including iTunes and, most recently, Apple Pay. But it appears a shift in the official stance on the company could be afoot.
In March, Beijing introduced potentially stringent but vaguely worded restrictions on online publishing, particularly by foreign firms. Although Apple apparently received the green light to launch iMoves and iBooks in China late last year, the country’s media regulator, the State Administration of Press, Publication, Radio, Film and Television has now told Apple to close them down, according to The New York Times, citing two unnamed sources.
“We hope to make books and movies available again to our customers in China as soon as possible,” an Apple spokeswoman said in a statement, without further elaboration on the issue.
The attention surrounding Apple’s recent scuffles with the FBI over unlocking an iPhone in a terrorism investigation could hamper its lobbying efforts in China. During a congressional hearing earlier this week, Apple’s general counsel, Bruce Sewell, said that the Chinese government had requested that the company share its source code some time over the last two years, and that Apple had refused.
While that line may bolster Apple’s pro-privacy stance in the U.S., it is unlikely to help its cause in Beijing. China’s anti-terrorism law requires tech companies to assist with decryption, however necessary, whenever state security agents demand it during investigations.
Wall Street analysts will be paying special attention to Apple’s China numbers when the company reports quarterly earnings on Tuesday.
Apple’s revenues in greater China, including Hong Kong and Taiwan, grew 14 percent year-on-year in the first quarter of 2016, the strongest gain in any market the company operates. Apple CEO Tim Cook has made regular visits to the country and said last fall that he believes China will eventually become the company’s top market.
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