The Trump administration’s sweeping executive order on Chinese social network WeChat could potentially deal a heavy blow to Apple’s most lucrative business. According to a new research note (via MacRumors) by longtime analyst Ming-Chi Kuo, Apple could lose more than a quarter of its iPhone sales in China (25-30%) if it’s forced to drop WeChat from the App Store.
The executive order, which President Donald Trump signed last Friday, August 7, blocks all transactions with WeChat, a social platform owned by the Chinese tech giant, Tencent. WeChat is an indispensable element of the digital lifestyle in China, as people rely on it for chatting, social updates, mobile payments, e-commerce, and a whole lot more. The app is used by nearly a billion people, and has even replaced email addresses or phone numbers in China.
China is Apple’s one of the key sources for revenue and accounts for about 20% of the total iPhone shipments.
“Because WeChat has become a daily necessity in China, integrating functions such as messaging, payment, e-commerce, social networking, news reading, and productivity, if this is the case, we believe that Apple’s hardware product shipments in the Chinese market will decline significantly,” Kuo claimed.
That’s not all. Since WeChat is imperative to the Chinese-Americans living in the United States for staying in touch with their folks back home, the WeChat ban could also affect iPhone sales in the country. If
In addition to iPhone sales, Kuo adds that shipments for other Apple product lines such as AirPods, iPad, Apple Watch, and the Mac could decline by 15-25% in China too.
As countries such as India and the United States continue to grapple with the coronavirus pandemic, China is also the only major smartphone market on an upwards trajectory. The trend has even enabled Huawei to secure the pole position for the first time on the global smartphone charts. A 30% drop in China sales could be, therefore, devastating for Apple that is already struggling to establish a strong foothold in the second-largest smartphone market, India.
- TikTok and WeChat to be banned from U.S. app stores on Sunday
- What happens if Trump bans TikTok?
- Judge rules that U.S. government can’t force WeChat off app stores
- For Chinese Americans, WeChat ban threatens their ties to home
- TikTok could be booted from app stores if Trump’s ban goes into effect