Kuo: Chinese shipments of the iPhone could drop by up to 30% if Apple forced WeChat to remove from the worldwide App Store [Updated]

At the very least, Apple’s annual shipments to China could drop by 25-30% if it is forced to remove WeChat from its App Stores worldwide, according to a new research note by analyst Ming-Chi Kuo. MacRumors. The removal could happen due to a recent executive order aimed at banning US transactions with WeChat and its parent company Tencent.

Kuo dismisses optimistic and pessimistic scenarios, depending on whether Apple is only required to remove WeChat from the US App Store or if the ban would apply to the ‌App Store‌ in all countries.

WeChat is extremely popular with Chinese mobile device users, essentially acting as its own platform on top of iOS and Android for many users, and Kuo argues that a worldwide ban on WeChat in the ‌App Store‌ would be devastating due to the size of ‘ the Chinese market.

Because WeChat has become a daily necessity in China, integrating features such as messaging, payment, e-commerce, social networking, news reading, and productivity, if this is the case, we believe Apple’s hardware product shipments will enter the Chinese market. decrease significantly. We estimate that annual ‌iPhone‌ shipments will be revised down 25–30%, and that annual shipments of other Apple hardware devices, including AirPods, iPad, Apple Watch and Mac, will be downgraded by 15–25% .

Under his optimistic scenario in which WeChat will only be removed from the US ‌App Store‌, Kuo predicts that ‌iPhone ferst shipments will be affected by 3-6% while other Apple products will be affected by less than 3%.

Apple does not break down its ‌iPhone‌ shipments by region, but overall, Greater China accounted for just over 15% of Apple’s total revenue in June in the quarter, making it a major part of Apple’s business. is.

Kuo advises investors to reduce their holdings of companies in Apple’s supply chain such as LG Innotek and Genius Electronic Optical because of the risks of a WeChat ban. However, it remains to be seen what will happen, as the bans in the executive order will not be in effect until September 20th. As a result, there is still time for the task to become clear, adapted, or dismissed.

Update 10:36 p.m. This article originally stated that the decline of 30% was in reference to Apple’s total ‌iPhone‌ shipments, but the research note is not entirely clear when referring to global or Chinese shipments. Given the Chinese share of Apple’s total sales, it seems more likely to refer to Chinese shipments.

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