Apple has bowed down and has removed VPN services in the country.
VPN applications have proven popular in China as they can circumvent this censorship. According to a blog post on the company's website, their preliminary research also indicated that "all major VPN apps" have similarly been pulled from the App Store in the country. With low cost local competitors cutting into the iPhone's market share, Apple's profits are more likely to rely on apps and services, some of which could run into China's censorship ruling.
The removal of VPN services from China's App Store was harshly criticized by some affected by the move.
The Chinese crackdown on VPNs is not particularly shocking, given the country's well-known isolation from the broader internet.
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One prominent and controversial champion of Internet freedom, the former NSA contractor Edward Snowden, quickly responded with outrage to Apple's move. "Our commitment to an open and free internet remains stronger than ever, and we will continue the fight in helping our users to stay connected, no matter where they are located". Chinese authorities now block access from multiple sites including Facebook, Twitter and more. China is the second leading market for Apple products after the United States.
Apple's China revenues have stalled, falling for a fifth straight quarter in January-March, when sales grew in every other region. Censors forced Apple to shut down its online book and film stores just six months after launching, the New York Times reported past year, citing sources. As Ben Thompson of Stratechery noted earlier this year in his newsletter, "The fundamental issue is this: unlike the rest of the world, in China the most important layer of the smartphone stack is not the phone's operating system". Companies such as Apple argued that letting the government break encryption would undermine the security of all users, while law enforcement said it was a necessary step for fighting terrorism.
It's too soon to say what Apple's decision on VPNs will mean for the future of its business in China, or for its policy battles elsewhere.
Apple might better serve its customers and democracy worldwide by taking a principled political stance in opposition to China's regulations on the grounds of human rights.