Apple’s annual global iPhone shipments could fall by as much as 30% if it is forced to remove WeChat from its App Stores around the globe, says Apple industry analyst Ming-Chi Kuo in a new research note shared by MacRumors.
Removal of the WeChat app could take place due to a recent executive order that aims to ban U.S. transactions with WeChat and its parent company Tencent.
Kuo laid out as to what could happen in various removal scenarios, depending on whether Apple is required only to remove the app from the U.S. App Store or if the ban would apply to all countries.
WeChat is extremely popular with Chinese users, the app is also widely popular around the world, with more than 1.2 billion monthly active users.
Because WeChat has become a daily necessity in China, integrating functions such as messaging, payment, e-commerce, social networking, news reading, and productivity, if this is the case, we believe that Apple’s hardware product shipments in the Chinese market will decline significantly. We estimate that the annual iPhone shipments will be revised down by 25–30%, and the annual shipments of other Apple hardware devices, including AirPods, iPad, Apple Watch and Mac, will be revised down by 15–25%.
Kup’s most optimistic scenario sees WeChat’s removal from only the U.S. App Store. In hat case, Kuo sees global iPhone shipments taking a 3-6% hit, while other Apple products perhaps taking a less than 3% hit.
Kuo says investors should reduce their stock holdings of companies in Apple’s supply chain such as LG Innotek and Genius Electronic Optical due to the possibilities of a WeChat ban. However, it is not certain what might happen when the executive order takes effect on September 20.