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.
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
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.