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Apple Inc. Stock Takes a Hit Amid Chinese App Store Controversy

Robert Waldo

Apple Inc. (NASDAQ:AAPL) has been in the spotlight for several reasons recently, but an old issue — the removal of apps from the Chinese Apple APP Store — has resurfaced. And AAPL stock is down about 0.2% in mid-day trading as a result.

AAPL CEO Tim Cook commented on the controversy today, citing an optimistic view on the potential return of its apps: “My hope over time is that some of the things, the couple of things that’s been pulled, come back. I have great hope on that and great optimism on that.”

Although the hype surrounding the launch of the iPhone X and AAPL’s likely record-breaking success during the holiday season are reasons to be up on AAPL stock’s prospects, Cook — and by extension the company — hasn’t be able to evade more nuanced issues in numerous political controversies.

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After AAPL removed several means of private communication from the Apple App Store in China, it received harsh criticism from speech rights groups. The “messaging apps and virtual private network (VPN) services … help[ed] users subvert China’s Great Firewall.”

The removal of social apps like Skype per the request of the Chinese Ministry of Public Security is part of the country’s greater crackdown on popular communication services like “Gmail, Facebook, Telegram, Twitter and … WhatsApp.”

Notably, Apple also removed more than 58,000 apps from the Chinese App Store earlier this year, but the company claimed it was an attempt to eliminate spam and copy-cat apps from its store. However, some interpreted it as a jab at Tencent Holdings Ltd (OTCMKTS:TCEHY), which owns several popular apps in China.

The critiques from locals and speech rights groups will likely haunt the company’s presence in China, a market where it has just started to demonstrate growth in again, unless the apps return to the Chinese Apple App Store or Cook can find another way to circumvent the issue.

Today, the political controversy caused a minor dent in AAPL stock. Only time will tell how significant the issue becomes as Apple tries to increase its growth prospects in China while competition from other smartphone producers increases.

Robert Waldo is an Assistant Editor at InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities.

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