The Chinese government just gave its people two more reasons to support home grown smartphones from the likes of Huawei and Xiaomi over Apple. Regulators have shut down Apple's iTunes Movies and iBook services in China, according to reports.
The digital media stores were launched in China about six months ago and Apple appeared to have secured the government's approval for opening them. But last week, China's State Administration of Press, Publication, Radio, Film and Television called for the stores' closure.
Offering reasons why it demanded the closure of the store, the regulatory body pointed to rules the Chinese government established in February that forbid foreign countries from publishing content online, according to reports.
And in a move that hints that things could get even tougher for Apple soon, the government agency supported its demands by citing an older rule, from 2008, that requires licenses to broadcast videos online. And only Chinese companies are eligible for those licenses.
An Apple spokesperson expressed the company's intent to push for the reopening of the iBook Store and iTunes Movies. But considering that Chinese regulators have just now began questioning Apple's Internet privileges, the company may be fighting a losing battle and could find itself treated like other foreign tech firms in China.
Impact on Apple Sales in China
The shuttering of iTunes Music and the iBook Store come just in time to dampen Apple's delivery of the iPhone SE, which arrived in China and other countries on March 31.
Generating $18.4 billion during the first quarter of 2016, a 14 percent increase year over year, the Greater China region, China and Taiwan, has brought Apple growth at a time when growth [pdf] in the America and Japan has been slowing.
China has been one of the few territories where a thirst for Apple's high-end handsets still remains. But with the current crackdown on Apple services, it appears the company's goodwill with China may be exhausted or close to it.
Impact On Apple And China's Relationship
For years, China has been crafting and enacting broad polices that throttle the growth of foreign companies doing business on its soil. The country has largely used antitrust investigations to collar the likes of Microsoft, Google, Toyota and other outsiders.
Much of China's aggressive policing of foreign tech company have been attributed to the 2013 revelations of former NSA whistleblower Edward Snowden, though some analysts and pundits have speculated that the country was looking to justify throttling outsiders in favor of promoting homegrown business.
Though Apple is one of eight companies China has said are too entrenched in the country's core, the tech company has enjoyed much more leniency from the government than has been afforded its contemporaries. While Apple hasn't had to suffer the raids and tall orders, there have been some rough patches in its relations with China.
The Chinese government performed what it called a security assessment of Apple products last year, acting on suspicions that iOS could have backdoors that enable the U.S. government to spy on consumers in China.
The Chinese government has been mum on that audit. Meanwhile, it has been sizing up iOS from another angle pertaining to the mobile OS's security — besides possibly offering backdoor access to the U.S. — it might be too secure for China's government.
Apple's war with the U.S. Department of Justice over iOS' high-level encryption has undoubtedly held the attention of the Chinese government, which had already been pushing for the company to offer officials in China exclusive to the mobile OS through a backdoor.