Apple Inc (NASDAQ:AAPL) shares have failed to fully recover from the shock of Huawei’s surprise drop of its new Mate 60 Pro smartphone.
To the surprise of global tech leaders, Huawei’s new phone is considerably more technically advanced than expected, given the strict tech sanctions imposed by the US government in recent years.
The Mate 60 Pro is powered by a seven-nanometer microchip, a level of technology the US has attempted to prevent entering China through a spate of sanctions and export controls.
Huawei’s controversial superpowered smartphone poses a risk to Apple’s penetration in the Chinese market.
Apple commands a 19% share of the Chinese smartphone market, having increased its share from 11% in 2020.
Conversely, Huawei’s share of its home market fell from 27% to just 11% following the US sanctions imposed in 2020.
But Huawei’s apparent technological speed run in the face of bruising sanctions took Apple investors by surprise, sending shares 7.6% lower to $175.15 when markets opened on Thursday.
Since then, Apple stock has recovered 2.5% to $179.63.
As investors weigh up the prospect of Huawei chipping away at Apple’s market share, the US government has launched a probe into potential breaches of sanctions.
South Korean chipmaker SK Hynix has also opened an investigation into how its NAND flash memory tech ended up in the Mate 60 Pro.
Huawei’s new Mate 60 Pro handheld runs on a seven-nanometer semiconductor, which is less powerful than the current five-nanometer benchmark.