Tech Tumbles: Apple Extends Stock Slump on Reports of a China Government iPhone Ban 9/7/23

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Jim Cramer (0:31)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (0:39)

Good Thursday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer at Post 9 of the New York Stock Exchange. David Faber is at Goldman's Communicopia Conference in San Francisco, where later today, we'll have an exclusive with Goldman's David Solomon 4:15 p.m. Eastern Time. In the meantime, futures red as some of the labor data today runs a bit warm, jobless claims lightest since February.

Our roadmap begins with Apple's China challenge. Shares moving lower on news of a broader iPhone crackdown. That decline also dragging down the broader markets. NASDAQ on pace for its fourth straight day of losses as stocks continue to shake September here. And media at a crossroads, why WBD CEO is still betting on the future of the cable bundle.

David may be a little scene setter. Actually, you know, we're gonna start with Apple this morning extending yesterday's losses. And Jim, you did discuss this on Twitter today as it looks like this is going beyond just government agencies.

Jim Cramer (1:30)

Well, I mean, I think that kind of go back to when Obama was president, it was 2015, he meets with Xi and Xi says he has no designs on the Straits of China. And then as soon as he leaves, he begins to have designs on Straits of China militarily. This is unfortunately a pattern. It's not something new.

President Xi meets with, well, Gina Romano meets with number two. She reiterates again that you're not going to get the chips that are artificial intelligence. That's really what's at the cross here.

But she says, listen, well, you know, I'm going to Disney World, really try to get things going, Shanghai Disney. And right in her face, didn't even wait 48 hours, basically, and says, listen, we're going to ban the company that is made in China for China. Perhaps the best combination we have in terms of what you'd like to have as a relationship with China, and so Carl, I come back and I say, you know, this ban really does matter. We don't know whether they were already using government, people always use Huawei, but it's the tone and the tenor. And if you remember, General Mundo came on our show, met money and said, listen, patience is thin. I don't know what happens now. I don't like it.

Carl Quintanilla (2:39)

I know you watched some of the B of A analysis on this.

Estimate maybe five to 10 million units are at risk here. Every one million units, about a penny in EPS. They do think the timing between this and the Huawei so-called breakthrough is interesting.

Jim Cramer (2:57)

Yes, it is. And David, you know, one of the things that's happened here is that we actually don't know. I'm gonna see some lines or no lines at the Apple stores, but we don't really know how much Apple was entrenched with people who work in the government anyway, because the government has been promoting Huawei. I don't know whether one comes in and whips out their iPhone. You've been in China. Is that the case?

David Faber (3:18)

Yeah, I don't know either. It's a good question, Jim. I think, listen, the Bloomberg story that Carl also cited, confirming the journal's reporting from yesterday, but extending it to the fact that this ban may extend to state-owned enterprises, that's gotta be a bit more concerning. If you don't let people come to work with their iPhones at state-owned enterprises as well, you guys know that's, you know, a lot of people carry two phones.

That could absolutely dampen demand, and certainly you can overlook the coincidence of Huawei coming up with a new entrant into the marketplace at this time.

Jim Cramer (3:54)

Right, and a 7 Nano, which is big, but is used. By the way, Carl, ARM is in the Apple phone. We got ARM coming up. It's gonna be an important deal.

One thing I do want to say is there is some fickle nature to the Chinese government. They have at times changed their mind, so I know I have an own it, don't trade it view on Apple. I met with Jeff Marks this morning as my colleague for my trust, and I said, do we have to change it?