Apple shares lose ground as China Covid protests threaten iPhone release and Elon Musk rips tech giant over ‘censorship’ in treatment of Twitter

Apple shares fell 3% today as they were buffeted by two headwinds: protests in China that threaten iPhone production and allegations of “censorship” filed by new Twitter owner Elon Musk.

The bigger challenge, at least in the short term, is the company’s all-important iPhone production pipeline, which has been damaged by protests across China against the country’s extreme “zero Covid” measures. Some reports describe the actions as the largest public protests against the government since the Tiananmen Square student riots in 1989. Disruptions at Apple’s factories related to the protests could cut production of iPhones by several million units while the company is currently home then is the fourth quarter of the holiday season.

Daniel Ives, an analyst at Wedbush Securities, wrote in a note to clients that Apple was “essentially caught in the crossfire when it comes to the all-important holiday season.” He estimates that up to 10% of Apple’s expected number of iPhone units could fail due to protests at Foxconn factories. Inventory levels at many Apple stores have fallen by as much as 40%, he noted, although the long-term viability of Apple’s hardware manufacturing business is intact, he said. However, around 52% of the company’s total revenue of $365 billion in 2021 will come from iPhone sales, so any disruption in the production flow is a major event.

Musk also ripped Apple repeatedly today in a barrage of tweets and responses, saying the tech company threatened to remove Twitter (which Musk acquired last month) from its App Store, “but won’t tell us why.” Musk has condemned the threats as “censorship” and intends to mobilize his 119 million followers on Twitter to take up his case against Apple.

Apple shares, which have been unusually volatile in recent weeks, fell to $143.99 on slightly below-average trading volume. While the tech giant managed to stay at a break-even level of around $175 until August last year, when giants like Amazon and Meta underwent major sell-offs in their shares, Apple’s stock has fallen by more than 15% since the share price plunged . . has lost its value.

App designers must always review their work before Apple agrees to make it available for download through the App Store, where Apple receives 30% of all app publisher revenue. Existing apps in the store are also regularly reviewed as new versions are considered. In addition to calling attention to the so-called “Apple tax” (the 30 percent fee), Musk accused Apple of “cooperating with the government” and stifling free speech. “Twitter’s suppression of free speech files will soon be published on Twitter itself,” Musk tweeted. “The public deserves to know what really happened…”

Apple has fallen out with a number of app developers over the years Fourteen days Video game maker Epic Games in a lawsuit that went to court last year. A federal judge’s ruling in the case was a mixed verdict, but largely in Apple’s favor. Epic filed an appeal, which is still pending.

Legal and financial aspects of the App Store aside, Musk’s recent efforts to shake up the “freedom of speech” pot come after the Tesla billionaire was forced to complete his $44 billion purchase of Twitter after spending months had to find a way to wring it out. After the formal takeover, he fired thousands of employees, including senior executives, who were responsible for content moderation policies. Musk has been a frequent critic of the social media company’s efforts to limit speech on the platform, saying it should instead function as a “town square” with open exchange of ideas. Many major advertisers have objected to the new mood on Twitter, with many stopping buying as the new era takes shape.

Confirming his commitment to a new approach to content on Twitter, Musk unbanned former President Donald Trump and also personally contributed to a new atmosphere by retweeting conspiracy theories and symbols of white supremacy. He also sought to diversify Twitter’s revenue (about 90% of which came from advertising, according to the latest publicly available figures) rather than charging users $8 a month for a verified or “blueprint” account.

Apple did not immediately respond to Deadline’s request for comment on Musk’s claims.