Last week’s order from the White House seeks to ban people and property under US jurisdiction from being involved with “any transaction that is related to WeChat.” The administration says further clarification on what transactions are banned will come later. But for now, the vaguely worded order has left many people confused. Some say this an intentional effort to dissuade US companies from operating in China.
Some analysts say it’s possible that Apple might have to stop offering Tencent’s popular messaging app on its iOS App Store worldwide. If that happens, the impact on Apple could be huge. By one estimate, global iPhone shipments could fall by as much as 25 to 30 per cent this year, according to TF International Securities analyst Ming-Chi Kuo, known for his Apple research.
Baffled WeChat users in China have been pondering what this means for them. When it comes down to it, though, it seems few will struggle to choose between iPhones and WeChat. In a Weibo poll asking people whether they would switch to a new smartphone or uninstall WeChat if the app disappears from iOS, more than 1.2 million out of 1.3 million people who voted indicated that they would get a new phone.
While a social media poll doesn’t represent all of China, the sentiment is real. It’s hard to overstate how essential WeChat is for Chinese smartphone users. More than just a messaging app, WeChat is also one of China’s two largest mobile payment apps, accounting for nearly 40 per cent of the US$8.4 trillion in mobile payment transactions just in the last quarter of 2019.
Kuo also warns that other Apple products could be affected by a WeChat ban. If Apple removes the app globally, shipments of other popular products like AirPods, iPads, MacBooks and the Apple Watch could shrink by 15 to 25 per cent, he says. If the app is only removed from the US App Store, shipments of these products might fall less than 3 per cent.