China Puts Wrench In Apple-IBM Partnership Plans With Device Ban


The Chinese government left off 10 Apple products from its government procurement list for security reasons, according to a Bloomberg report.

These products include the iPad, iPad Mini, MacBook Air and MacBook Pro.

The full list of banned products has not been released yet, but the iPhone could join the party.

[Related: IDC: Top 5 Best-Selling Smartphone Brands in Q2]

The smartphone was labeled a threat to national security after a Chinese news report aired last month stating that the iPhone continues to track the location of users, even when the device is turned off.

Apple isn't the first U.S. company to have some of its products excluded. Microsoft's Windows 8 was also banned by the Chinese government in May.

This latest news calls into question how it may impact Apple and IBM's recently announced partnership as it could restrict both from reaching the growing Chinese market.

"I think it's stupid. The short-term effect of it is not good for Apple and it's not good for the partnership with IBM," said Stephen Monteros, vice president of business development and strategic initiatives at SIGMAnet, an Ontario, Calif.-based solution provider and Apple partner. "Most U.S. corporations have affiliations within China, but I'd have to guess this is something temporary. Apple is a number one player in the tablet space. It doesn't help China not to have that available. This has to do with security, and Apple will be asked to have locked down features on iOS, and they'll have to follow through with features that China wants. There will be a compromise around it."

China has excluded other U.S. companies in the industry as well, bolstering its own local tech companies, including Huawei and Lenovo.

"I think, in general, they've been cracking down on U.S. products," said Steve Baker, NPD Group VP of industry analysis. "This is a pretext to promote as many Chinese hardware products as they can. There is no Google there. They have their own Twitter and Facebook. There are a lot of web services that people in other parts of the world use that are U.S. products, but China has their own versions. They've been pushing Microsoft and put pressure on other software companies. In China, the trend has been moving towards more and more native Chinese brands."

Both IBM and Apple did not respond to a request for comment.

The latest IDC numbers show smartphone vendors, such as Lenovo and Huawei, are booming thanks to their success in international markets.

Huawei saw 95.1 percent year-over-year growth in its smartphone market share, selling 20.3 million smartphones worldwide in the second quarter, while Lenovo's market share in China nearly tripled. Apple continues to post healthy smartphone sales, despite not releasing an iPhone in 2014, but IDC said that's largely the result of growth in BRIC markets. 

PUBLISHED AUG. 6, 2014