Chinese gov't shuts down Apple’s iBooks Store and iTunes Movies

China is Apple's second largest market by revenue after the U.S.

Apple logo from inside Apple Store in Boston
Blair Hanley Frank

A Chinese regulator is said to have ordered Apple to shut down its iBooks Store and iTunes Movies only six months after the services were launched in the country.

The action against Apple in a country, which it rates as its second largest market by revenue after the U.S., came from the State Administration of Press, Publication, Radio, Film and Television, reported The New York Times, quoting two persons who spoke on the condition of anonymity.

U.S. tech companies have been under pressure to comply with Chinese Internet regulations and censorship, with some Internet services like Facebook and Twitter blocked in the country.

But Apple has had more success in negotiating this market, which was reflected in its launch in February of its Apple Pay service in tandem with bank card network China UnionPay, despite competition from local players like Alipay.

The current incident will not have any immediate impact on Apple's device sales because both iBooks Store and iTunes Movies were launched only a few months back, and Chinese consumers have many alternative platforms they can turn to, said Tay Xiaohan, senior market analyst at IDC China.

The shut down of the services could, however, affect the relationship between Apple and the Chinese government, Tay said. There could also be a larger impact in the long term if more Apple services are blocked, such as Apple Pay, which play a crucial part in locking Apple users into its ecosystem, the analyst added.

The two Apple services were shut down last week, but an Apple spokeswoman told NYT in a statement that the the company hopes "to make books and movies available again to our customers in China as soon as possible.” 

Apple did not immediately comment on the closure of the services. The Chinese regulator could not be immediately contacted.

The company's smartphone business had a strong fourth quarter in China. It shipped a record 15.5 million iPhones, and ranked third in the market with a 13 percent market share, Strategy Analytics said in January. The company was helped by extending its retailer coverage across the country and by Apple Music and other localized services, the research firm said.

Copyright © 2016 IDG Communications, Inc.

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