Foreign media 9to5 Mac reported that a report earlier today pointed out that WeChat poses a huge potential threat to the future of the iPhone in China. Analyst Ming-Chi Kuo worries that the Trump administration may force Apple to delete the WeChat application not only from the App Store in the US, but also globally.
IT Home is informed that Tianfeng International analyst Ming-Chi Guo warned that this may lead to a 30% reduction in global iPhone sales. This sounds exaggerated, but the actual situation may be like this…
In China, WeChat is everything
As Connie Chan explained in 2015, WeChat is more than just a messaging service: it is basically an entire operating system.
“In the context of the messaging application trend, a lot of articles about WeChat have been written, but outside of China, few people really understand how it works – and how it can achieve the distant vision of a completely intelligent The world of mobile phone management…
In addition to basic communication functions, Chinese WeChat users can also get car-hailing, ordering meals, buying movie tickets, playing casual games, checking in, sending money to friends, accessing fitness tracker data, making doctor appointments, obtaining bank bills, and paying Water bills, finding coupons around, identifying music, searching for books in the local library, meeting strangers around you, following celebrity news, reading magazine articles, and even donating to charities… all in one integrated In the application.
The way it achieves this goal is through one of the least exposed aspects of WeChat: the groundbreaking model of’application in application’. Millions (note, not just thousands) of lightweight applications live inside WeChat, just like web pages live on the Internet.
This makes WeChat more like a browser for a mobile website, or it can be said to be a mobile operating system-with its own proprietary application store. This is not what we expect from a messaging app. “
Straterchery blogger Ben Thompson expressed this in simpler language in 2017.
“All aspects of a typical Chinese life, not only online, but also offline, are carried out through an application.”
As foreign media emphasized last year, this means that ordinary Chinese will open WeChat as soon as they pick up a smartphone . Almost everything else they did happened in this one app.
The threat of WeChat has always existed
WeChat has always brought challenges to Apple. The iPhone manufacturer emphasizes the integration of hardware and software, and a large part of its publicity for each new generation of iPhone is implemented around the current iOS system.
Apple’s problem is that most Chinese iPhone buyers don’t pay much attention to the iOS system itself. They like Apple’s hardware and brand image, which can be used on iOS and Android. For most people, smartphones are just devices that use applications such as WeChat.
This means that it is very easy for Chinese mobile phone brands to grab market share from Apple. As long as the hardware can be attractive and can create some brand prestige, it is a threat.
The new WeChat threat is crucial
If Trump simply banned WeChat from entering the US App Store, the impact would not be great. It will still have an impact because there are WeChat users in the United States. These users include Chinese citizens living in the United States, and users who have relatives and friends in China. Under such circumstances, Guo Mingchi believes that Apple’s global iPhone sales will drop by 3% to 6%.
But Trump’s approach may go further than that. Trump signed an executive order last week banning all transactions with TikTok owner Bytedance – and WeChat owner Tencent. One of the explanations seems not too exaggerated, and that is that Apple must stop all business relationships with Tencent – so on a global scale… Delete WeChat from the App Store, including China.
IPhones without WeChat are basically useless in China. No one wants to, no one wants to buy. This is why Guo Mingchi proposed that this will kill iPhone sales in China and other countries where WeChat is popular, without the slightest exaggeration. The sharp decline in iPhone sales also means losing the market for AirPods, Apple Watch, and of course Apple services. It seems obvious that the total global iPhone sales will decrease by 25%-30%.
This will be Cook’s biggest challenge to Trump
Apple CEO Tim Cook and US President Donald Trump have little consensus. Their views are very different. But Cook has always believed that contacting Trump and trying to influence him is better than cutting all ties.
Trump has threatened Apple’s business in many ways. When Trump implemented the immigration ban, Cook said that hundreds of Apple employees were affected.
When Trump imposed import tariffs on products made in China, the first hit was Apple accessories, which later covered almost all products sold by the company.
Cook continued to work with the Trump administration to strive for exemptions for Apple products – these efforts were basically successful. Some people say that this is an unlikely relationship, which is very gentle, but Cook mostly succeeded in persuading Trump.
Doing the same thing with WeChat threats will be Cook’s biggest challenge to Trump so far. This will require Cook to persuade Trump to overturn or creatively reinterpret his latest executive order – and to do so quickly.
The stakes have never been higher. Apple has enough profit margins to cushion tariffs for at least a period of time, but it will lose the entire Chinese market overnight, and it will be devastating when it is about to launch the first ever iPhone 5G phone. This is a battle that Cook must win.
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