The numbers looked brutal for Apple. An executive order signed by U.S. President Donald J. Trump will prevent U.S. companies from transacting any business with Chinese super app WeChat starting in the middle of next month. Heavily used in China, over 1 billion people rely on WeChat for browsing, sending and receiving email, shopping online, to make mobile payments, and more.
Apple iPhone sales may not take a hit in China after all based on the latest interpretation of Trump's executive order
Apple. Some iPhone users in China said that if they could not load WeChat from the App Store, Apple's iOS-powered handset would be useless to them, reduced to "expensive electronic trash." Ouch! One survey posted on Chinese micro-blogging site Weibo surveyed 1.2 million people and asked them to choose between keeping WeChat or keeping their iPhone. 95% said that they would prefer to save their WeChat account. TF International analyst Ming-Chi Kuo told clients that if Apple was forced to ban WeChat from the App Store, global iPhone sales would decline by 25% to 30% while 15% to 25% declines would be expected for the AirPods, iPads, and the Apple Watch.Because WeChat is so important to the Chinese, the executive order at first promised to be a huge problem for
The reason why Trump signed the executive order is the same reason why the current administration is looking to ban TikTok in the states and destroy Huawei, ZTE, and other Chinese firms. Any tech company from China is seen as an arm of the Communist Chinese government, using their devices and components to spy on American consumers and corporations. There never has been any smoking gun that proves this and there is more to this policy than meets the eye.
There is potentially some good news for Apple today; Bloomberg reports that the Trump administration is quietly telling U.S. companies, including Apple, that despite the executive order, they can do business with WeChat in China. If true, this means that Apple won't have to remove the app from the App Store and iPhone sales won't suffer in China because of the popularity of WeChat. Consider that 20% of Apple's total sales come from the country and that the majority of its devices are manufactured in China. That could leave the company open to retaliation by the Chinese government; for Apple, it would seem that it had the most to lose from the executive order. But if the U.S. government isn't forcing Apple to remove WeChat from the App Store in China, it's good news for the tech giant.
It seems that only now are administration officials actually looking at the impact of the executive order on U.S. tech firms and other industries in the states. Those familiar with the deliberations inside the Trump administration warn that there are still discussions taking place about whether the White House will allow Apple and Google to list the app in their global app stores outside of the U.S. One person close to the situation said that senior administration officials are in talks about the scope of the order although whatever course of action they decide on can be overruled by the president.
Officials also point out that the goal of the executive order isn't to instantly shutdown WeChat in the U.S. Instead, the goal is to let the app slowly die out by preventing it from being installed or updated on devices in the states. For example, travelers entering the U.S. from abroad will be able to use the app, but won't be able to update it. That means that anyone from a foreign country who travels to the U.S. for an extended period of time will eventually end up with an obsolete version of WeChat that won't work.
Lobbyists in the U.S. have been working hard to be heard by the administration and are trying to get them to understand the downside of the executive order. Craig Allen, president of the US-China Business Council said, "We are talking to everyone who will listen to us. WeChat is a little like electricity. You use it everywhere” in China.