Trump’s WeChat Ban Could Adversely Affect iPhone Sales: Kuo

Joanna Estrada
August 12, 2020

As a result, the order will force Apple to remove WeChat from its App Stores worldwide.

The stock fell 4.8% Monday and almost reached Friday's low. Because this super app implements a wide range of functions, it's become critically important to users in China.

Deteriorating relations between the US and China are raising investor concerns about the geopolitical impact on economies and markets.

Apple's iPhone shipments could fall by as much as 30pc following President Donald Trump's ban on Chinese messaging app WeChat. The loss of WeChat on iPhone could be huge for Apple, with analyst Ming-Chi Kuo suggesting it could hurt the company in one key area - iPhone shipments.

According to Kuo, Apple's "annual global iPhone shipments could decline by 25-30 per cent if it is forced to remove WeChat from its App Stores around the world".

For context, WeChat now has more than 1.2 billion users worldwide. Removing WeChat from the App Store in China will undoubtedly be disastrous for Apple, especially since iPhones don't allow app installation from any other sources. Chinese Android as well as iPhone owners use WeChat extensively, and a worldwide ban on the app could have far-reaching consequences for Apple. Kuo notes that as per his estimates, 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%. Apple was recognized as the fastest-growing smartphone maker in China in the second quarter, during which iPhone sales jumped 225 percent, according to Shanghai-based CINNO Research.

Kuo says if WeChat is only removed from the US ‌App Store‌ then the global ‌iPhone‌ shipments would be impacted by 3-6 per cent with other Apple products being affected by less than 3 per cent. Kuo recommends that investors should reduce their stock holdings in companies in Apple's supply chain such as LG Innotek and Genius Electronic Optical, due to the risk posed by the WeChat ban.

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