Trump's attack on WeChat likely a major blow to Apple: survey
Published: Aug 09, 2020 11:02 AM Updated: Aug 09, 2020 10:52 PM

A user swipes on his smartphone while WeChat logos appear in the background, 14 May 2020. Photo: IC

US President Donald Trump's bullying of Chinese company Tencent might end up striking a much heavier blow to Apple with the potential loss of the vast majority of its Chinese users, who help to generate up to 20 percent of the company's global sales, while at the same time boosting the sales of other mobile brands, such as Huawei, that Trump has always wanted to crush.

Trump issued executive orders on Thursday to ban the Chinese social networking apps TikTok and Tencent's WeChat from operating, if they are not sold to American companies within 45 days, citing the so-called national security concerns.

However, a fact that comes to light following Trump's blatant sanction is that WeChat is not only a daily messaging app for Chinese users, but also a business and payment tool for almost every Chinese mobile user. Forcing users to make a choice between iPhone and WeChat will risk Apple immediately losing the majority of Chinese iPhone users - an outcome that has already been verified unanimously by several online surveys.

As of July, the number of mobile Internet users in China reached 1.32 billion, according to the Ministry of Industry and Information Technology. Meanwhile, data by WeChat Open Class in 2020 suggested that the number of WeChat daily active users has exceeded 1.1 billion, which suggests at least 83 percent of all mobile internet users use WeChat on a regular basis.

Against the backdrop of Trump's sanctions, many media outlets and individuals are hosting online polls in a bid to get a clear glimpse of the public response if WeChat were removed from the Apple Store due to the sanction. The results were unanimous.

An online survey conducted by the Global Times on WeiBo on Sunday offered the general public three options: Apple, WeChat and "unclear", if WeChat was banned from the Apple Store.

As of press time, more than 1,036 people had participated in the survey in which 838 people choose to switch to an Android mobile if they could not use WeChat on Apple's IOS, 130 people said they had not made up their minds yet, and only 70 users would still use Apple without WeChat.

Another platform, Xueqiu, saw similar results after launching an online survey on Friday. More than 850,000 people participated in the survey, of which 800,900 people choose to ditch iPhone if they could not use WeChat on it, and less than 50,000 users said they would still use Apple.

A netizen named RoseMingyuejie is an iPhone user herself said that she will switch to an Android mobile in order to use WeChat, but at the same time, she will ask Apple for compensation for not being able to use WeChat on her iPhone.

Similar polls can be found on some platforms online and the results of many polls suggest that up to 90 percent of respondents on average chose not to use their iPhone in return for access to the WeChat app, with Huawei one of the most popular alternatives.

The results were as expected, even by many US industry analysts and media.

Alex Dobie, Android Central's executive editor, said on his Twitter on Friday that it can't be overstated how massive WeChat is in China since the app is used for 'everything,' ranging from chatting to payments, utility bills, plane and train tickets.

"A phone without WeChat in China is more useless than an Android device without GMS in the West. It's that big of a deal," Dobie said.

As one of the largest markets for Apple, some 20 percent of iPhone sales globally are from China, and taking WeChat off the App Store "would be a serious hindrance," Bloomberg reported on Friday, citing Anand Srinivasan, an analyst with Bloomberg Intelligence.

However, Liang Zhenpeng, a veteran industry analyst, told the Global Times on Sunday that if Trump takes his own course of action, there is a high possibility that WeChat will be banned from Apple's App Store.

"If such a thing did happen, which I think is very likely given the current situation, the impacts would be dramatic to WeChat's global business, but also will harm Apple's products as WeChat has become a pre-installed app on many mobile devices, especially in the Chinese market," Liang said, predicting an up to 10 percent drop in sales for Apple globally.

Industry observers noted that if Apple loses Chinese customers due to the ban on WeChat, it also means huge losses and risk for the American firm since most high-end users of Apple will likely move to its Chinese rival Huawei.

US companies in China, such as Nike, Starbucks and KFC, would also find themselves in a difficult situation. WeChat's mini-apps function provides users with easy access to their services, without having to download additional apps - this service could also disappear with the WeChat ban.

"Whether the US government will require its firms to practice the same order in their overseas markets as their home market is still unclear. If the requirement is like that, it will cause obvious damage to those US firms which are relying on the Chinese market to restore business after the COVID-19 disruptions," said Jia Mo, an analyst at market research firm Canalys.

"I don't think the order targeted at WeChat will be executed as it is contrary to the intention of the US government: to let its firms become more competitive and earn more," Jia told the Global Times Sunday.

However, the actual impact on Apple may only worsen if the impact caused by the TikTok ban is also considered.

According to app market research firm Sensor Tower's global app list for the first half of this year, TikTok has been downloaded 626 million times, ranking first in the world, with the revenue generated by Apple and Google systems reaching $421 million, the third highest in the world.

In line with the possible infliction, Apple shares fell 2.5 percent to close at $444.45 in the New York Stock Exchange on Friday.

Apple undoubtedly treats China as one of the most important overseas markets and it cannot afford to risk losing the market, analysts said.

"If iPhone holders move to domestic smartphone vendors, Huawei will become the biggest winner and other leading brands like Xiaomi, Vivo and OPPO will also win some customers," said Jia.