National scrutiny towards WeChat may spell dismal numbers for Apple.
Last week, Trump issued executive orders to ban Chinese-owned apps TikTok and WeChat from US operation within 45 days, unless they are sold to US companies. According to industry analyst and Apple-watcher Guo Mingji at TF International Securities, removing WeChat from its US app store could cost Apple up to 30% losses in global iPhone sales.
In his analysis, Guo looked at the impact on of WeChat’s potential removal from the US App Store. In the best-case scenario, Guo estimated a 3-6% sales loss in iPhone sales; in the worst-case, a much higher loss of 25-30%.
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The executive order accuses WeChat of censorship and allowing “the Chinese Communist Party access to Americans’ personal and proprietary information.” As many have noted, the ban will make it difficult for the millions of Chinese diaspora in the U.S. to communicate with friends and family in China, especially as messaging apps like Whatsapp, Facebook’s Messenger, and Telegram are not available in China.
Apple has found itself in a tricky position. On one hand, the company has set a precedent of removing apps at the request of foreign governments — they removed WeChat from the Indian app store within hours of India’s WeChat ban. However, as the company plans to stock 70 million units of the iPhone 12 with support for China’s GPS competitor, the Beidou Navigation System, it’s clear that Apple has big plans for the Chinese market.
Apple’s dilemma isn’t unique. Tencent and ByteDance are two of China’s biggest tech juggernauts, and removing them from play in the US economy will mean trade-offs regardless.
