Amid Apple-FBI Fight, China Looms

An Apple store displayed iPhones in Nanjing, China, last year. The company gets most of its revenue from outside the U.S. Apple derives roughly 25% of its revenue from the greater China region.

Apple’s refusal of the Federal Bureau of Investigation’s request to help unlock a shooter’s iPhone has been a hot topic not only in its home country but in its biggest foreign market: China. As WSJ’s Li Yuan writes in her “China Circuit” column:

Some Chinese have questioned whether the move is a marketing stunt, but others have supported Apple for standing up to the government—something unimaginable for Chinese companies. Some also have asked: What if the Chinese government asked Apple to do the same thing? Could Apple say no?

That question points to a significant issue for the company in the current standoff: Complying with the FBI in the San Bernardino, Calif., iPhone case could make it much harder for Apple to rebuff the demands of repressive governments in China and elsewhere abroad for access to the phones of, say, democracy activists or other dissidents. It’s an especially important concern for Apple, which gets most of its revenue from outside the U.S. The company derives roughly 25% of its revenue from the greater China region, which includes the mainland, Hong Kong, Macau and Taiwan.

Apple has alluded to this issue, without naming China. In its filing to a federal court in California last week, Apple warned about the dangers of building a backdoor into the iPhone. “Once developed for our government, it is only a matter of time before foreign governments demand the same tool,” the filing says.

Benjamin Qiu, a partner in law firm Loeb & Loeb’s Beijing office, says if Apple were to lose the battle with the FBI, China’s government would have every reason to make similar requests.

“Compared to the Chinese government, FBI is a pushover,” he says.