The Trump executive order banning U.S. companies from having a business relationship with WeChat has many ramifications, and analyst Ming-Chi Kuo fears the hit after iPhone sales will be significant.
Once the order is fully executed, WeChat would be removed from the App Store worldwide. WeChat is a critically important app for the Chinese market and when it is no longer available on iOS, iPhone sales may decrease by as much as 30%.
WeChat is more than just a messaging platform for Chinese users. It handles payments, social networking, news, online shopping and much more. WeChat is often described as an ‘OS within the OS’ because of how many different features it contains.
At the time of writing, all transactions between US companies and WeChat are prohibited. This would mean that Apple would have to remove the app from the App Store in all areas within 45 days, as Apple would no longer have a contractual relationship with WeChat. However, many expect that the administration will weaken the conditions by that time.
If the executive order is made clear to require Apple only to remove WeChat from the US App Store, then the impact is much less serious. In this eventuality, Kuo predicts a 3-6% iPhone sales decline.
Last week also broke news that the president forced the Chinese social media company TikTok to sell its US operations. Microsoft and others are currently believed to be in negotiations for a deal that could be worth tens of billions of dollars.
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