Does Apple Inc. (NASDAQ:AAPL) Have Regulatory Issues In China?

Does Apple Inc. (NASDAQ:AAPL) Have Regulatory Issues In China?

Apple (NASDAQ:AAPL) reports 1Q17 earnings results; Topline up 3%; Tops Estimate

Apple Inc. (NASDAQ:AAPL) is one of the few companies that is walking on a tight rope in China balancing its business and the regulations. However, the company has been told to ensure compliance of its regulations in respect of streaming apps that are available on its App Store of Chinese version for download. Being the second biggest economy, the tech bellwether could not afford to risk losing the market.

Apple has already been losing its smartphone share in China. For instance, the iPhone maker enjoyed a market share of 14.3 percent in 2015 that dropped to 10.4 percent as cheap smartphones dominated the market. China’s Cyberspace Administration has advised tech bellwether to screen live streaming apps carefully for complying with its governing regulations in respect of online content.

The regulatory advice came on the back of at least three live streaming services, Houshanzhibo, Hujiao, and Toutia, available in App Store that failed to comply with Chinese regulations in respect of monitoring live streaming content and identify users, according to eMarketer.

The company is already facing a complex position China since it cannot afford to ignore 772 million internet users.

Apple is probably one of the select companies that is still surviving the regulatory and the government’s actions. Other companies like Facebook Inc (NASDAQ:FB), Alphabet Inc (NASDAQ:GOOGL) and Netflix, Inc. (NASDAQ:NFLX) could not manage the substantial regulatory hurdles. As a result, both Facebook and Google were banned while Netflix withdrew on its own.

Live streaming apps have witnessed tremendous growth in China in recent time. It is quite like that this might not enable Apple to generate more revenue since most of them are offered for free. However, the apps have drawn attention of regulator following some incidents of pornographic content and other inappropriate material for public dissemination. The government could not afford to leave that and drew its censors. Also, if the regulators have to refocus their concerns on paid apps, it could spell danger for the American firm.

In pre-market, Apple is trading up 0.11 percent.