Fears about China's government ban on iPhones are 'way overdone,' as the crackdown could impact only 1% of the smartphone's sales in China: analyst

• Investors are spooked over Beijing banning government officials from using iPhones at work.
• But Wedbush's Dan Ives says the fears are 'way overdone' as the ban could only impact 1% of iPhone sales in China.

Fears about Apple's prospects in China following Beijing's ban on iPhone use for government officials may be overblown, according to two analysts.

Investors have been worried about the recent development — Apple shares lost about $200 million in value after the Wall Street Journal reported China ordered its central government officials not to use Apple's iPhone and phones from other foreign brands at work.

However, Dan Ives, a prominent Wedbush analyst, said the fears are "way overdone," as the ban is likely to impact about 500,000 units of iPhone — that's 1.1% of 45 million units of the smartphone that are expected to be sold in China in the next year, he wrote in a note on Thursday.

Another analyst also thinks concerns about Beijing's ban on the iPhone in government workplaces are overblown.

"The headline is a negative for Apple, but it is not clear how much of an impact this will have as party officials have likely avoided using American products in the workplace for long before the official ban was enacted," Amit Daryanani, an analyst at Evercore ISI, wrote in a Thursday note, per MarketWatch.

There's also another reason why Beijing is unlikely to widen an iPhone ban in the country.

Apple has 1 million employees in China and supports around another 4 million jobs through its manufacturing and tech ecosystems, per the company's Chinese website.

Daryanani said it's unlikely for Beijing to enforce more restrictions, "unless Apple begins moving supply chains out of China at a rate that makes China uncomfortable."

The ban comes amid heightened tensions between Washington and Beijing, which are mired in a tech war. China's ban on foreign phone brands in government agencies echoes similar restrictions in the US — such as a New York City ban on TikTok on government-owned devices.

Apple shares closed 0.35% higher at $178.18 apiece on Friday. They've lost 6% since Wednesday after the news of China's iPhone ban broke. Overall, the stock is up 37% higher this year.

Apple and Evercore did not immediately respond to requests from Insider for comment sent outside regular business hours.