Apple’s iTunes Movies and iBooks services in China started operations less than seven months ago, but last week, both were closed down. The U.S. firm e-mailed a one-paragraph statement, saying it wants to restore the services as soon as possible but did not provide a timeframe for it, says Bloomberg.
More restrictions on Internet services
Citing unidentified people familiar with the matter, The New York Times said China’s State Administration of Press, Publication, Radio, Film and Television ordered the closings. A couple of months ago, that agency and the Ministry of Industry and Information Technology worked on new rules governing the publication of virtually all types of Internet content in China. The regulations took effect last month.
Tech companies in China also offer services like Apple’s iTunes Movies and iBooks Store, noted The Times, but it did not claim that the shutdown was meant to thwart competition. Whether the move is a precursor to wider restrictions on Apple services or not cannot be said with certainty for now.
Last month, China’s President Xi Jinping announced that the country would accept foreign Internet companies, provided they abide by Chinese laws and regulations. The country’s leading tech players, including Alibaba chairman Jack Ma and Huawei chief Ren Zhengfei, were called upon to participate in the discussion about the dissemination of online content, with President Jinping being the host.
According to Xinhua, China’s state-run news agency, Xi said, “China must improve management of cyberspace and work to ensure high-quality content with positive voices creating a healthy, positive culture that is a force for good.”
A big blow to Apple
This shutdown has come as a serious blow to Apple since China is a key growth market, and top company executives, including CEO Tim Cook, expect it to overtake the U.S. in terms of revenue. For Apple, the U.S. is the largest market, followed by Greater China (Hong Kong and Taiwan included). For the three months ending in December, a rise of 14% was seen in the region’s revenue in the region, and Cook plans to continue investing in the region despite its economic slowdown.
Research firm Canalys notes that Apple’s shipments accounted for a 12.5% share in the December quarter, making it the third-largest smartphone vendor in China. Huawei and Xiaomi were the top two vendors with a 15% share each.
On Thursday, Apple shares closed down 1.08% at $105.97. Year to date, the stock is down by over 1%.