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Apple iPhone Global Sales likely to drop up to 30 percent if the US bans WeChat

Apple iPhone Global Sales likely to drop up to 30 percent if the US bans WeChat - Appy Pie

Apple’s annual iPhone shipments will likely fall by about 25–30 percent if it is forced to remove WeChat, a messaging, social media, and electronic payment application owned by the Chinese company Tencent Holdings Ltd from its App Store globally, as per an online report by Apple research analyst Ming-Chi Kuo.

This report came into the picture after the US President Donald Trump signed an executive order on August 6 banning US transactions with Tencent, owners of messaging app WeChat, within 45 days. The iPhone owners use WeChat extensively, and a worldwide ban on the app could lead to bad consequences for Apple.

The report suggests that if the app gets banned just in the US market then iPhone sales would decline up to 6 percent and other Apple products sales might fall by 3 percent.

“We estimate that the annual iPhone shipments will be revised down by 25–30 percent, and the annual shipments of other Apple hardware devices, including AirPods, iPad, Apple Watch and Mac, will be revised down by 15–25 percent,” said Kuo in the research note.

Apple analyst Ming-Chi-Kuo warns that a worldwide ban would be devastating for Apple, due to the size of the Chinese market.

The report says that Kuo believes if the US bans WeChat app, Apple will be forced to remove it from the AppStore as well. The report further states, “Since WeChat had become a daily necessity for Chinese users, integrating communications, payments, e-Commerce, social software, news reading, and productivity functions, we believe that the move will drop ‌iPhone‌ shipments in the Chinese market.”

The analyst added that global shipments of other Apple devices are likely to drop by up to 25 percent. Kuo has further advised the investors to reduce their stock holdings of companies in Apple’s supply chain like LG Innotek and Genius Electronic Optical due to risks of a WeChat ban.

Apart from the ban order on TikTok, President Trump also issued another similar executive order against WeChat. Over the ban order WeChat’s parent company Tencent said it was reviewing the order to get a full understanding.

Kuo has been one of the most reliable sources for information about future Apple hardware products. He is less well known for pricing or software issues. However, in this situation, he sees the potential impact as being serious enough to caution the readers of his investment notes.

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