The Trump administration wants to get rid of Chinese apps it considers a threat to its national security as quickly as possible. If there has been a lot of talk about TikTok in recent days, the United States also let it be known that WeChat was in its sights.
Tencent’s messaging app, which can also be called a “super app,” is hugely popular in China. Its ban by the United States could have very serious repercussions for Apple. Indeed, according to analyst Ming-Chi Kuo, an App Store without WeChat could cause a collapse in iPhone sales.
IPhone sales down 30% in China
According to Ming-Chi Kuo, a generally knowledgeable analyst when it comes to Apple, two different more or less optimistic scenarios are possible. If Apple were to be forced to remove WeChat from all App Stores, the impact on iPhone sales would be catastrophic given the size of the Chinese market.
In the least optimistic scenario, if the app is banned worldwide, iPhone sales could indeed drop 25-30% in the Middle Kingdom. And this could also spill over to other devices like iPads, AirPods and Apple Watch, whose sales could also drop by 15 to 25%.
In the most optimistic scenario, where WeChat would only be banned from the App Store in the United States, the analyst predicts a decline in iPhone sales of 3-6%, while sales of other products from Apple would suffer a 3% drop.
WeChat, the heart of digital China
In China, besides messaging, WeChat is simply a must have. The application is used to pay and to be paid, as a social network, as a news platform, as a reservation service, to access official state documents, etc. It’s impossible to live in China without WeChat. In a country where cash and credit cards are starting to disappear, the application has taken root in the very heart of society. No equivalent has seen the light of day in the Western world.
In the coming months, the anti-China policies of the United States could weigh heavily on Apple’s results. In the second quarter, the Chinese market accounted for 15% of Apple’s revenue. Xi Jinping’s government has yet to decide to attack the California brand in retaliation for the actions of its American counterpart, but that could eventually change.