The “war” between Trump and China is using the most dominant companies as stones in economic chess. If on the one hand Huawei has been challenged for more than a year, now with decisions to ban certain Chinese applications on American devices, Apple could also lose a huge market. Analysts said that with the WeChat lock on the iPhone, if it is extended to the Apple store in China, the loss could be huge.
According to a recent consumer survey in China, the confrontation between using iPhone or using WeChat could shake Apple’s $ 44 billion sales empire.
Apple vs WeChat, arm wrestling that Apple may lose
Apple has one of its main markets in China. The sales of the American giant have been growing and the brand's position is gaining strength, among hundreds of Android competitors fixed there. However, black clouds seem to be approaching this work that the Cupertino company has been doing over the past few years.
According to reports, iPhone fans across China are now reconsidering their connection to the device. After Donald Trump issued an executive order last week banning American companies from doing business with WeChat, people weighed which would be most advantageous for their lives.
Currently in China, WeChat has a very heavy weight on the lives of people in society. Thus, this application has become the tool for virtually everything in the daily lives of millions of Chinese. The app is used to communicate, for shopping at the supermarket, for transport, for access to sports areas, for access to shows, for practically everything that requires payment and identification. The Chinese say that WeChat is the most important app they have on their phone.
Therefore, when the importance of the iPhone or the app that is closely linked to the life of each Chinese is weighed, the answer is easy.
WeChat block should only be in the United States
Earlier this week, several market analysis companies pointed out that the blockade would only affect WeChat in the United States. So, the little impact will feel on the WeChat app and service side in the giant Asian market. However, Trump's words may still bring problems to Apple.
The American company has just come out of a strong quarter in China. Its most important international market and where it is facing increasingly intense competition from local Android rivals such as Huawei. In addition, Huawei even without an American store offers WeChat in its store.
The Cupertino company's strategy of attracting buyers who have never owned an iPhone by offering a cheaper device, such as the iPhone SE, could be totally undermined.
WeChat connects millions of people worldwide
WeChat is a multiplatform instant messaging service developed by Tencent in China, originally launched in January 2011. It currently has around 1 billion users worldwide. So, if Apple is forced to remove the service from its global application stores, annual iPhone sales will fall by 25% to 30%.
In addition, other products will also be affected, such as AirPods, iPad, Apple Watch and Mac computers. According to analyst Kuo Ming-chi, it is estimated that these could lose between 15% to 25%.
In survey conducted on the Weibo service, a social network similar to Twitter, was asking consumers to choose between having WeChat or having the iPhone. More than 1.2 million responses so far, with around 95% of participants preferring to give up their devices.
The ban will force many Chinese users to switch from Apple to other brands because WeChat is really important to us. My family in China is used to WeChat and all of our communication is on the platform.
Explained Sky Ding, a Fintech employee in Hong Kong, to Bloomberg.
In short, these Trump decisions could call into question many millions for Apple and, indirectly, for other American companies. As a curiosity, since the iPhone started to be sold in China in 2009, it has sold more than 210 million units. Of course, a drastic drop in iPhone sales will also bring unemployment to China. Apple employs thousands of people in the many factories that are used in the production of its equipment.