Apple Inc. spent years building China into a $44 billion growth driver. Then the U.S. president last week cast all that in doubt.
IPhone loyalists across China are now reconsidering their attachment to the device after Donald Trump issued an executive order last week barring U.S. companies from doing business with WeChat, the super-app that has become integral to everyday life in the country. Scheduled to come into effect in roughly five weeks, the ban threatens to turn iPhones into expensive “electronic trash,” said Hong Kong resident Kenny Ou, who sees WeChat as one of the most essential software on his handset.
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On Wednesday, Tencent executives on a post-earnings conference call stressed they believed the ban applied only to WeChat in the U.S. and shouldn’t affect its Chinese cousin, known as Weixin. But they added that they themselves were still seeking clarity, and the sweeping language of Trump’s order means it could still spell trouble for Apple.
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If Apple was forced to remove the service from its global app stores, iPhone annual shipments will decline 25% to 30% while other hardware, including AirPods, iPad, Apple Watch and Mac computers, may fall 15%-25%, TF International Securities analyst Kuo Ming-chi estimated in a research note. Apple didn’t immediately respond to Bloomberg News’ requests for comment.
A survey on the twitter-like Weibo service asking consumers to choose between WeChat and their iPhones has drawn more than 1.2 million responses so far, with roughly 95% of participants saying they would rather give up their devices. “The ban will force a lot of Chinese users to switch from Apple to other brands because WeChat is really important for us,” said Sky Ding, who works in fintech in Hong Kong and originally hails from Xi’an. “My family in China are all used to WeChat and all our communication is on the platform.”
Don't these people have anything more important to think about? Maybe a pandemic that's out of control? Maybe twenty straight weeks of record unemployment?