Ming-Chi Kuo: Apple iPhone sales could decline up to 30% over WeChat ban

According to analyst Ming-Chi Kuo’s worst-case scenario, Apple’s global iPhone sales could decline by 25–30% annually if the company is forced to remove WeChat from its App Stores around the world.

The removal could occur due to a recent executive order from President Trump that seeks to ban U.S. transactions with WeChat and its parent company Tencent.

Apple's iPhone 11 Pro Max
Apple’s current flagship smartphone, the iPhone 11 Pro Max

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. We estimate that the annual ‌iPhone‌ shipments will be revised down by 25–30%, and the annual shipments of other Apple hardware devices, including AirPods, iPad, Apple Watch and Mac, will be revised down by 15–25%. — Ming-Chi Kuo

Eric Slivka for MacRumors:

Under his optimistic scenario in which WeChat is only removed from the U.S. ‌App Store‌, Kuo predicts global ‌iPhone‌ shipments would be impacted by 3–6% with other Apple products being affected by less than 3%.

Apple does not break down its ‌iPhone‌ shipments by region, but overall, Greater China accounted for a little over 15% of Apple’s total revenue during the June quarter, making it a significant part of Apple’s business.

Kuo recommends that investors reduce their stock holdings of companies in Apple’s supply chain such as LG Innotek and Genius Electronic Optical due to the risks of a WeChat ban.

MacDailyNews Take: Trump’s executive order banning WeChat (and TikTok) goes into effect on September 20th, but there are many outstanding questions and a lot could happen before we start worrying about iPhone sales in China.

13 Comments

  1. Let’s get this clear up front: the Chinese state uses WeChat as a tool to suppress freedom.

    https:// http://www.bbc.com/news/amp/blogs-china-blog-48552907

    That said, it is also an irreplaceable tool for Americans and third-country nationals (including opponents of the regime) to communicate with anyone inside China, and for those in China to communicate among themselves.

    https://www.bbc.com/news/amp/world-asia-china-53686507

    In short, this is a complex issue not well served by simplistic solutions.

  2. I’m not sure what this has to do with China. Trump would never be able to manipulate the Chinese App Store, just the American one.. where.. no one cares about WeChat.

    1. Who do you think owns and operates the Apple App Stores in China? If that company has been ordered not to engage in any transactions with Tencent, how does that not affect the Chinese App Store? I hope the Administration will reverse its position, but it is currently pretty clear.

      1. When the CCP allows Facebook, Google, Youtube, Instagram and Snap Chat then we can talk.

        The ONLY reason WeChat took the lead as the world most used app is because 1.4 billion people don’t have a choice. I bet things might be different if the people inside of the CCP great firewall had a choice.

        Look at Hong Kong where they still have freedom (for now) WeChat number 3

        Whats App
        Facebook
        WeChat

        In Taiwan
        1. Line
        2. Facebook
        3. Messenger
        4. Zenly
        5. WeChat

        The only reason WeChat is number one is because ……

        So why again should we allow the CCP apps to be in our market but we are banned in their country ?

        https://www.similarweb.com/apps/top/apple/store-rank/hk/social-networking/top-free/iphone/

    1. Not quite end of story. A web app would likely be even less secure and more invasive than an iOS native app, so the next US move would be to require American ISPs to block the web site. That, in turn, would establish the precedent that the government can block sites it disapproves of. Slippery slope.

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