Apple iPhone shipments could drop 30% following WeChat ban, one analyst says
President Trump signed an executive order banning 'financial transactions' with WeChat as well as TikTok
Apple recently reported third-quarter earnings that saw a return to growth for the iPhone, however, shipments of the smartphone could drop as much as 30% if the tech giant is forced to remove WeChat from its App Store, according to one analyst.
Influential KGI Securities analyst Ming-Chi Kuo told investors global shipments of the iPhone could drop by that amount if the executive orders signed by President Trump last week to ban popular apps TikTok and WeChat forced Apple to ban WeChat around the world.
"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," Kuo wrote in the report, first reported by MacRumors. "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%."
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If Apple were forced to remove WeChat only from the U.S. App Store, Kuo estimates a more modest decline in global iPhone shipments, dropping between 3% and 6%, with other Apple products declining less than 3%.
In its most recent quarterly results, Apple said revenue associated with Greater China was $9.3 billion, up from $9.1 billion in the year-ago quarter.
FOX Business has reached out to Apple with a request for comment.
Last week, Trump ordered an unspecific ban on "financial transactions" with the companies that own TikTok and WeChat, ByteDance Ltd. and Tencent Holdings, respectively. Both executive orders, which were signed for each app, will take effect in 45 days, FOX Business reported.
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"The United States must take aggressive action against the owner of WeChat to protect our national security,” read the executive order, announced Thursday night.
WeChat has more than 1.2 billion monthly active users around the world.
On Wednesday, U.S. Secretary of State Mike Pompeo said, “We want to see untrusted Chinese apps removed from U.S. app stores. President Trump has mentioned impending action on TikTok, and for good reason.”
“With parent companies based in China apps like Tiktok, WeChat and others are significant threats to personal data of American citizens, not to mention tools for CCP content censorship,” Pompeo added.
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Following the executive order, China’s foreign ministry said it opposes the executive orders and will defend the rights of Chinese businesses, according to ministry spokesman Wang Wenbin.
"The U.S. is using national security as an excuse and using state power to oppress non-American businesses," Wenbin told reporters, according to Reuters. "That’s just a hegemonic practice. China is firmly opposed to that."
Shares of Apple were rising early Monday trading, gaining 0.7% percent to $447.65.
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Fox Business' Caitlin McFall contributed to this story.