Apple annual global iPhone shipments could see a decline of up to 30 percent if the company is forced to remove Tencent owned messaging app WeChat.
Apple analyst Ming-Chi Kuo has released a new research note obtained by MacRumors. On the heel of the United States’ new executive order, effectively banning the use of WeChat, Kuo predicts the ban could make an impact on Apple’s iPhone shipments. Kuo poses two possibilities, one being if Apple is forced to remove the app from its App Store in every country. The other, which appears to be the best-case scenario, is if Apple would effectively only have to remove WeChat from the App Store within the US market.
Kuo’s research notes state: “Because WeChat has become a daily necessity in China, integrating functions such as messaging, payment, e-commerce, social networking, news reading, and productivity if this is the case, we believe that Apple’s hardware product shipments in the Chinese market will decline significantly. We estimate that 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%.”
In light of the possibility that Apple may only have to remove WeChat in the United States, the impact on shipments would be less severe. Kuo predicts iPhone shipments may only be impacted by three to six percent. Along with that, Apple’s other hardware would only be affected by less than three percent as well.
WeChat, while an incredibly popular messaging app in China, is used globally. On both iOS and Android, there are more than 1.2 billion monthly active users. The global ban of WeChat from the App Store would be quite damaging to the company and user base.
The executive order will not be instated until September 20th. Kuo has suggested investors reduce stock holding of supply chain companies LG Innotek and Genius Electronic Optical due to the risks of the WeChat ban. However, given how much time there is until the executive order is in place, the stipulations of the order can be brought to light.