Several reports suggest that what could have been a massive threat to iPhone sales has now been resolved.
One interpretation of an executive order from President Trump would have banned Apple from doing any business with WeChat owner Tencent, even in China. It was estimated that this could have cost Apple as much as 30% of its worldwide iPhone revenue …
Background
Earlier this month, President Trump signed an executive order banning U.S. companies from doing business with Chinese companies ByteDance and Tencent, owners of TikTok and WeChat, respectively. The rating was unclear, with some suggesting this meant Apple would have to remove WeChat from all of its App stores, including China.
The possible consequences of this would have been dramatic. Almost no one in China would buy an iPhone if it could not run WeChat for reasons explained here, and China is the second largest brand of Apple after the US. Remarkable Apple analyst Ming-Chi Kuo estimated that this could reduce global iPhone sales by 30%.
Apple warned the White House about the ‘harsh’ implications of banning WeChat, and fortunately the administration appears to be listening definitively.
After all, threat to iPhone sales is looming
While Trump seemed completely unconcerned about the potentially devastating effect on Apple – responding with the single word ‘Whatever’, it would now appear that more adult heads have overcome.
IN Bloomberg report said the administration had since realized the consequences of an all-out ban.
The Trump administration seeks to include private U.S. companies including Apple Inc. that they can still do business with the WeChat messaging app in China, according to several people familiar with the matter, two weeks after President Donald Trump ordered a U.S. ban on Chinese -owned service.
In recent days, senior administration officials have reached out to some companies, realizing that the impact of a sweeping ban on the popular app, owned by China’s Tencent Holdings Ltd., could be devastating for U.S. technology, retail, gaming, telecommunications and others. sectors, said people familiar with the talks.
Analysts at Wedbush said they had heard the same thing from their own political contacts.
This is in line with our view and dissertation based on recent conversations with contacts within the Beltway that the WeChat ban will not adversely affect or disrupt Apple’s ecosystem in the key China market, which accounts for about 20% of ‘ represent the total upgrades over the next 12 to 18 months. While the WeChat ban in the US (App Store) is important for Apple, we believe Chinese consumers should see no restriction with this app, which is especially important in the long-awaited 5G iPhone 12 superbike of it company, ready to launch in early October.
It is also consistent with greatly improved supply chain reports following the previous uncertainty.
Our recent inspections for Asian supply chain conducted by our TMT team show a distinguishable uptick in forecasts for iPhone 12
The company says this has put the iPhone 12 on course to be a defining moment in the company’s history.
Apple has a ‘once in a decade’ chance in the next 12 to 18 months, as we roughly estimate 350 million of Cupertino’s 950 million iPhones worldwide are in the window of an upgrade opportunity. China remains a key ingredient in Apple’s recipe for success, as we estimate roughly 60 million to 70 million iPhone upgrades will come from this region next year […]
We believe that iPhone 12 is the most important product cycle for Cook & Co. represents since iPhone 6 in 2014 and will be another defining chapter in the Apple growth story.
The change does not completely eliminate the threat to iPhone sales – Kuo estimates that impact will remain at 3-6% – but the much larger threat seems to have been averted.
Photo: Karl Mondon / Bay Area News Group
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