Ming-Chi Kuo: How Trump’s WeChat ban could hurt Apple

From MacRumors, which has a pipeline to Kuo’s research notes:

In a worst-case scenario, Apple’s annual iPhone shipments could decline by 25–30% if it is forced to remove WeChat from its App Stores around the world, according to a new research note from analyst Ming-Chi Kuo viewed by MacRumors. The removal could occur due to a recent executive order aiming to ban U.S. transactions with WeChat and its parent company Tencent.

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%.

Under his optimistic scenario in which WeChat is only removed from the U.S. ‌App Store‌, Kuo predicts ‌iPhone‌ shipments would be impacted by 3–6% with other Apple products being affected by less than 3%.

My take: What are the odds Trump backs-off his executive order?

See also: How reliable is Ming-Chi Kuo?

6 Comments

  1. David Emery said:
    Apple has already demonstrated ‘regionality’ in App Store to conform with different national requirements. This sure feels like FUD to me, asserting that a Trump ban would impact Apple world-wide.

    4
    August 10, 2020
    • Gary Morton said:
      Agree, and there is no corporate leader better at threading the international regulatory needle than Tim Cook.

      3
      August 10, 2020
      • David Drinkwater said:
        Yeah, but there is also no better diptwit-in-chief than Trump at creating political BS noise. (Sorry, Philip, I just can’t help myself.)

        0
        August 11, 2020
  2. Jerry Doyle said:
    @David Emery & Gary Morton: I agree with both gentlemen. My understanding of the EOs is that they deal with national security issue concerns affecting the US government. The US has more military bases in more countries outside the US than any other country, but the US government prior to the issuance of the EOs already ordered its military personnel to delete the questioned apps from their personnel’s phones. The US, to my knowledge, has no military base in China and the EO of the president has no legality in the authoritarian CCP of the PRC.

    2
    August 10, 2020
  3. Thomas Larkin said:
    The only thing that would surprise me is if they’re wasn’t a legal challenge before any such ban even took effect.

    0
    August 10, 2020
  4. Jerry Doyle said:
    “… My take: What are the odds Trump backs-off his executive order?”

    I would say the odds are poor. National security issues relative to China stealing American industrial secrets and monitoring habits of American citizens for influencing behavior is of chief concerns to both major political parties. Whether it is Donald J Trump are Joe R Biden sitting in the Oval Office come Wednesday January 20, 2021 at 9:00 am, we are looking at a structural change and underlying differences between the two super powers going forward. Tougher views with government and leaders of both American political parties already are baked deeply into the political and government systems. The kind of engagement envisioned by Richard Nixon and Bill Clinton’s approval of China’s admittance into the WTO did not lead to a more “opened“ Chinese society, but instead resurrected a China’s failing economy and military only to bite the hands that fed it. The CCP is stronger today and more authoritarian than before its engagement with the US and nations of the world through the WTO.

    1
    August 10, 2020

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