President Trump’s executive order banning WeChat could have far-reaching consequences for almost the entire technology industry, thanks to the app’s parent company, Tencent, having investments in companies like Riot Games and other US-based brands. But the ban could also have a big impact on Apple, which is deeply entrenched in China.To get more
China news, you can visit shine news official website.Apple has a significant Chinese customer base, and nearly all of its critical manufacturing and assembly partners are based there. Trump’s ban might not only force Apple to remove WeChat from its App Store — which would destroy Apple’s Chinese smartphone business — it could existentially change how Apple is able to build and sell new products in the future. It’s hard to emphasize the prominence of WeChat in China. As analyst Ben Thompson put it in 2017,“There is nothing in any other country that is comparable, particularly the Facebook properties (Facebook, Messenger, and WhatsApp) to which WeChat is commonly compared. All of those are about communication or wasting time: WeChat is that, but it is also for reading news, for hailing taxis, for paying for lunch (try and pay with cash for lunch, and you’ll look like a luddite), for accessing government resources, for business. For all intents and purposes WeChat is your phone, and to a far greater extent in China than anywhere else, your phone is everything.” An iPhone without WeChat is effectively not a phone at all for the hundreds of millions of Chinese users that rely on the service — customers on which Apple’s entire iPhone business model relies. If Apple can’t offer WeChat on the iPhone due to Trump’s ban, then much of its Chinese business will almost certainly evaporate overnight. Respected analyst Ming-Chi Kuo says Apple’s annual iPhone shipments in China could be reduced by 25 to 30 percent if it’s required to remove WeChat from its App Stores around the world.Sales of other related Apple hardware like Apple Watches, iPads, AirPods, and Macs could be reduced by 15 to 25 percent.Apple is caught in a trap of its own making here, thanks to its locked-down platform. A more open system, similar to Google’s Android, would let users install WeChat without Apple’s explicit approval. It wouldn’t be ideal for Apple, but at least millions of Chinese customers could still use their iPhones. But the WeChat / Tencent ban could have an even more dramatic impact on Apple by escalating the ongoing conflict between the United States and China, which have been embroiled in a trade dispute for years.Apple has already started to feel the initial ramifications here: a 25 percent tariff on five parts for its Mac Pro desktops; 10 percent tariffs on its chargers, the HomePod, AirPods, and Apple Watch; a narrowly dodged 15 percent tariff on iPhones that could have raised the cost of Apple’s most crucial product by $150. Apple physically can’t outsource its manufacturing anywhere else in the world (and certainly not in the US). Then-COO Tim Cook led a 2005 shift to “just-in-time” manufacturing that cuts down on excess inventory and constantly pumps out new products. The result is that Apple today is almost exclusively reliant on Chinese manufacturers like Foxconn. It’s so important to Apple that when factories shut down from COVID-19, it caused hiccups down Apple’s entire supply chain — and may even have caused delays for the upcoming iPhone 12 lineup this fall.
