U.S. Markets closed

Apple sets new iPhones as China omission looms

Aaron Pressman

Surprising almost no one, Apple (AAPL) plans to unveil its iPhone upgrades on September 9, about the same time of year as last year and the year before. But the company also faces new complications in China, one of its most important markets.

The web site Recode reported the Sept. 9 date for the expected iPhone 6 roll out. Apple is expected to offer two new models, one with a 4.7-inch screen and the other with a 5.5-inch screen, entering the so-called phablet category for the first time.

The larger screens, up from Apple’s current 4-inch models, could hit sales of phones running Google’s (GOOGL) Android software, especially those made by Samsung, which is already suffering from an onslaught of cheaper phones made by Chinese competitors.

Shares of Apple were unmoved by the leaked release date, closing at $95.12, down 0.5%, on Tuesday.
On the negative side of the ledger, a Bloomberg report on Wednesday noted that the Chinese government, which has been hassling U.S. tech companies endlessly of late, left Apple’s iPads and Macbook laptop off a list of acceptable devices that could be purchased by government entities.

The move follows a July report on Chinese state media raising security concerns about the iPhone.
Microsoft (MSFT), Qualcomm (QCOM) and other leading U.S. companies have also seen their business practices under scrutiny in China in the wake of spying allegations revealed by Edward Snowden. Tensions increased further in May after American prosecutors indicted five Chinese military officers for alleged spying activity.

China last month raided Microsoft’s local offices and said it was collecting information as part of an anti-monopoly investigation.

China has been critically important to Apple’s financial success this year. In the second quarter, Apple’s revenue in China rose 28% from the prior year while revenue from sales to the entire rest of the world rose less than 3%. Overall, revenue from China makes up about one out of every six dollars Apple generates.

Still, it’s not clear if the government list will have much impact on consumer buying decisions. The government procurement list also included products made by other American companies such as Hewlett-Packard and Dell, Bloomberg reported. The list, which included Apple products in an earlier version, could be modified again.