Fresh report says Apple may not be forced to remove WeChat from its Chinese App Store

08/23/2020 Business


The figures looked brutal for Apple. An executive order signed by US President Donald J. Trump will prevent US companies from taking over all business with Chinese super-app WeChat starting in the middle of next month. Heavily used in China, more than 1 billion people rely on WeChat to browse, send and receive email, shop online, make mobile payments, and more.

Apple iPhone sales likely to take no hit in China based on Trump’s latest interpretation of the executive order

Because WeChat is so important to the Chinese, the executive order first promised to be a big problem Call. Some iPhone users in China said that if they could not download WeChat from the App Store, Apple’s iOS-powered handset would be useless to them, reduced to “expensive electronic trash.” Ouch! One survey posted on Chinese micro-blogging site. Weibo surveyed 1.2 million people and asked them to choose between keeping WeChat or keeping their iPhone. 95% said they would rather save their WeChat account. TF International analyst Ming-Chi Kuo told clients that if Apple were forced to ban WeChat from the App Store, global iPhone sales would decrease by 25% to 30%, while 15% to 25% decreases are expected for the AirPods, iPads, and the Apple Watch.

The reason why Trump signed the executive order is the same reason why the current administration is seeking to ban TikTok in the states and destroy Huawei, ZTE, and other Chinese companies. Every tech company from China is seen as an arm of the communist Chinese government, using its devices and components to spy on American consumers and corporations. There has never been a smoke gun that proves this and there is more to this policy than meets the eye.

There is potentially some good news for Apple today; Bloomberg reports that the Trump administration is quietly telling U.S. companies, including Apple, that despite the executive order, they can do business with WeChat in China. If true, this means that Apple does not have to remove the app from the App Store and iPhone sales will not suffer in China due to the popularity of WeChat. Note that 20% of Apple’s total sales come from the country and that the majority of its devices are manufactured in China. That could leave the company open for compensation by the Chinese government; for Apple, it seems that it had the most to lose from the executive order. But if the US government does not force Apple to remove WeChat from the App Store in China, it’s good news for the tech giant.

It seems that now only government officials are really looking at the impact of the executive order on U.S. tech companies and other industries in the states. Those familiar with the discussion within the Trump administration warn that there are still discussions taking place over whether the White House will allow Apple and Google to list the app in their worldwide app stores outside the US. One person close to the situation said senior administration officials are in talks about the scope of the order, although what course of action they decide on could be overridden by the president.

Officials also state that the purpose of the executive order is not to shut down WeChat in the US immediately, instead the goal is to gradually eradicate the app by preventing it from being installed or updated on devices in the states . For example, travelers entering the US abroad may use the app but will not be able to update it. That means anyone from abroad who travels to the US for extended periods of time will eventually end up with an outdated version of WeChat that will not work.

Lobbyists in the US have worked hard to be heard by the administration and try to get them to understand the disadvantages of the executive order. Craig Allen, president of the US-China Business Council, said: “We talk to everyone who will listen to us. WeChat is a bit like electricity. You use it everywhere” in China.

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