Published 10:50 IST, August 10th 2020
Trump's WeChat ban could could impact iPhone sales in China: Apple Analyst
Trump’s order banning U.S. companies from doing business with the Chinese messaging app 'WeChat' could have the biggest impact on iPhone sales in China
President Donald Trump’s order banning U.S. companies from doing business with the Chinese messaging app 'WeChat' could have the biggest impact on iPhone sales as one of its most important markets is China. It could lead to an estimate of 25-30 percent drop in shipments, said an analyst, in an interview to the Chinese mouthpiece. The executive order to ban Tencent's WeChat would block all transactions involving WeChat, which would further prohibit Apple from distributing WeChat to mobile devices through its global App Store, an Apple analyst Guo Mingji said.
"The US's ban on WeChat could have the biggest impact on iPhone, with an estimate of 25-30 percent drop on shipments. The most pessimistic scenario is that Apple has to remove WeChat from the global App Store", Guo Mingji, Apple analyst was quoted by Chinese mouthpiece Global times.
WeChat an essential app in China
WeChat is one of the most important apps used by mobile phone users in China. They use it for shopping, payments, email, web browsing and all forms of business and personal communications. Even visitors to the country have to download the app and load it with money in order to make small purchases. Without access to WeChat, consumers would likely to refuse to buy an iPhone in China, according to an online survey conducted in China by market analysts.
Trump issued executive orders on Thursday to ban the Chinese social networking apps TikTok and Tencent's WeChat from operating, if they are not sold to American companies within 45 days, citing the national security concerns. US companies in China may also find it difficult to make business post the ban on WeChat and other apps.
The risks for American firms in China
Furthermore, industry observers noted that if Apple loses Chinese customers due to the ban on WeChat, it also means huge losses and risk for the American firm since most high-end users of Apple will likely move to its Chinese rival Huawei.
WeChat's mini-apps function provides users with easy access to their services, without having to download additional apps this service likely to disappear with the WeChat ban.
Trump signs executive order banning Chinese apps
Trump on August 6 signed an executive order banning American citizens and businesses from doing any transaction with Chinese-owned application TikTok, its parent company ByteDance Ltd. and messaging app WeChat after 45 days. Trump in his executive order stated that these steps have been taken because the applications mentioned above threaten the national security, foreign policy, and economy of the United States. Trump has accused the Chinese-owned apps of storing personal data of American citizens and possibly sharing it with Beijing.
Updated 10:50 IST, August 10th 2020