If Trump bans Apple from offering WeChat, people in China could ditch iPhones in droves

Trump’s executive order banning WeChat-related transactions could potentially force Apple to remove the Tencent app from the iOS App Store

iPhone shipments could plummet by 30 per cent if Apple users in China can't download WeChat, said widely-cited Apple analyst Ming-Chi Kuo

Reading Time:3 minutes

Tencent said in May that WeChat now has 1.2 billion monthly active users globally. Photo: Bloomberg

Published: 6:00pm, 10 Aug 2020Updated: 12:28am, 11 Aug 2020

Many Chinese Apple fans would hate giving up their beloved iPhones. But the reality is that users in China may not need their iPhones as much as they need WeChat, and a new executive order by US President Donald Trump could force them to choose between the two.

Last week’s order from the White House seeks to ban people and property under US jurisdiction from being involved with “any transaction that is related to WeChat.” The administration says further clarification on what transactions are banned will come later. But for now, the vaguely worded order has left many people confused. Some say this an intentional effort to dissuade US companies from operating in China.

Some analysts say it’s possible that Apple might have to stop offering Tencent’s popular messaging app on its iOS App Store worldwide. If that happens, the impact on Apple could be huge. By one estimate, global iPhone shipments could fall by as much as 25 to 30 per cent this year, according to TF International Securities analyst Ming-Chi Kuo, known for his Apple research.

Apple did not respond to questions about WeChat’s possible removal from the App Store.

Baffled WeChat users in China have been pondering what this means for them. When it comes down to it, though, it seems few will struggle to choose between iPhones and WeChat. In a Weibo poll asking people whether they would switch to a new smartphone or uninstall WeChat if the app disappears from iOS, more than 1.2 million out of 1.3 million people who voted indicated that they would get a new phone.

While a social media poll doesn’t represent all of China, the sentiment is real. It’s hard to overstate how essential WeChat is for Chinese smartphone users. More than just a messaging app, WeChat is also one of China’s two largest mobile payment apps, accounting for nearly 40 per cent of the US$8.4 trillion in mobile payment transactions just in the last quarter of 2019.

WeChat is also where people get much of their news and follow their favourite bloggers on public accounts. And thanks the myriad mini programs offered in the app, users can also hail taxis, order food, shop, pay bills and do so much more all without ever leaving WeChat. Some liken the app to an operating system. This is on top of the network effect that locks people into the app that their friends and family use.