The Chinese government demanded that Apple shut down its online book and movie services after the country’s video and publishing regulator imposed stricter guidelines on online content.
Apple suspended its iBooks and iTunes Movies services last week after meeting with the State Administration of Press, Publication, Radio, Film and Television.
Beijing earlier in the year introduced new regulations for online publishing to match its more rigid limits on traditional publishing, Reuters reported. The new rules bar firms with any foreign ownership from being involved in web publishing.
The shutdown raises questions about Apple’s long-term growth prospects in China as iPhone sales are starting to slow for the first time and it looks to other services to drive growth in the country, which is Apple’s second largest market by revenue.
It’s not the first time Apple has run afoul of local laws, but it has had a number of successful service launches over the past nine months. Apple Pay officially launched in China in February after sealing a deal with the country’s dominant card-payment processor UnionPay. And last September Apple launched its cloud-based music streaming service in China, offering subscribers access to a library of millions of songs for CNY10 ($1.56) a month after a three-month free trial.
But in late 2014, in response to government pressure to improve security of customer data, Apple controversially started hosting mainland users’ data on its iCloud service on China Telecom servers. Storing data on servers based in China should help speed up delivery and improve the user experience for domestic users, but it also allows the government to demand user data stored on the local servers.
Apple’s iPhone gained market share in urban China over the three months ending January, taking a 25 per cent share of smartphone sales, although the growth rate was the slowest since late 2014, according to Kantar Worldpanel ComTech.