WeChat ban could impact Apple’s global iPhone shipments: Analyst predicts

WeChat ban could impact Apple’s global iPhone shipments: Analyst predicts”

For example, the US' most valuable company, Apple, may be forced to remove WeChat from the App Store.

The stock fell 4.8% Monday and almost reached Friday's low. Since it is one of the widely used apps in China, analyst Ming-Chi Kuo suggests it could also negatively impact one of America's most profitable companies. Suppliers to Apple Inc. saw some of the biggest declines.

Apple's iPhone shipments could fall by as much as 30pc following President Donald Trump's ban on Chinese messaging app WeChat.

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Besides TikTok, President Donald Trump has banned United States transactions with WeChat and its parent company Tencent by issuing an executive order last week.

For context, WeChat now has more than 1.2 billion users worldwide.

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If the US government forces Apple to remove WeChat only from the US App Store, global iPhone shipments would decline between three and 6%.

"WeChat has become a daily necessity in China, integrating functions such as messaging, payment, e-commerce, social networking, news reading and productivity". This would be a significantly lesser impact than if WeChat is banned from App Store worldwide. "We estimate that global ‌iPhone‌ shipments will decline by 25-30%".

"We estimate that the annual ‌iPhone‌ shipments will be revised down by 25-30pc, and the annual shipments of other Apple hardware devices, including AirPods, iPad, Apple Watch and Mac, will be revised down by 15-25pc".

According to the report Apple's Greater China shipments accounted for slightly over 15 per cent of its total revenue in June quarter.

Much of the Cupertino-based company's manufacturing is done in China, and if the country targets Apple's exports that would impact its business globally, Srinivasan said. Kou analysed optimistic and pessimistic scenarios that depend on whether Apple has to ban WeChat from its App Store across the world, or if Apple removes Tencent's WeChat from the App Store only in the US. Kuo via MacRumors has hinted that the ban of Tencent's WeChat app might lead to a drop of up to 30 percent in iPhone sales worldwide. "As a result, there is still time for the order to be clarified, modified, or rescinded".

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