Analysts Say That WeChat Ban Could Reduce iPhone Sales

by Noah Harris

Analyst Ming-Chi Kuo says that WeChat ban will have a significant impact on iPhone sales. As part of the U.S. President's executive order, the Chinese service may be removed from the App Store worldwide.

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According to the signed document, on September 20, individuals and legal entities from the United States will be prohibited from interacting with Tencent, which owns WeChat.

The U.S. President accuses WeChat of collecting data on U.S. citizens.

This executive order bans U.S. companies from having a business relationship with WeChat, which has more than 1 billion users. Apple will have to remove the app from the App Store worldwide after 45 days, as it can no longer have a contractual relationship with WeChat.

WeChat is a mission-critical app for the Chinese market: it is often even described as an “O.S. inside the O.S.” due to its large number of functions. The Chinese service combines the functions of a messenger, a social network, and an electronic payment system.

Ming-Chi Kuo believes that if the availability of WeChat on iOS is limited in all countries, including the Chinese segment of the App Store, iPhone sales may decrease by 30%. If the executive order clarifies the need to remove WeChat only from the American App Store, the consequences will be much less severe. In this case, Ming-Chi Kuo predicts a drop in iPhone sales by only 3-6%.

Along with the ban on transactions with Tencent, Donald Trump also banned ByteDance, the owner of TikTok.