According to a news report, the US ban on WeChat, owned by the Chinese company Tencent Holdings Ltd can impact Apple business up to worth $28 billion. Apart from the ban order on Chinese short-video-making app TikTok, US President Donald Trump also issued another similarly-worded executive order against WeChat.
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āThe WeChat ban could impact up to $28 billion in iPhone/iPad sales in China as well as related impacts to Service revenue,ā reports Seeking Alpha.
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China is Appleās third largest market where it amassed about $44 billion in net sales in 2019.
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The ban puts the Chinese market for Apple devices, primarily iPhones and iPads, at high risk if a full crackdown occurs.
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Apple, along with Ford, Walmart and Disney has called on the Trump administration to end the executive order seeking the ban of WeChat. China is still a very important market for Apple products, as the third largest revenue driver and the second largest contributor to net income on an operating margin basis.
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āIf 75 percent of iPhone/iPad sales in China vanish because of this (ban), that estimates a decline of $21 billion in net revenues aside from a related drawdown in services, which could add $4-5 billion to that decline estimate,ā said the report.
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If 50 percent of iPhone/iPad sales vanish, that would estimate a decline of $14 billion in net revenues, and services associated could add another $2-3 billion to that decline.
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According to famed analyst Ming-Chi Kuo, the executive order to ban WeChat from the Apple App Store could lead to 25-30 per cent drop in iPhone shipments in the Chinese market.
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At least 95 per cent of the 1.2 million Chinese Apple users said that they would rather switch to an Android device than use an iPhone without WeChat.
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China, with its population of 1.44 billion people, accounted for about 15 percent of Appleās total June quarter revenue.
