On the evening of August 6, U.S. President trump signed an executive order against wechat, saying that 45 days after the signing of the executive order, “no one is allowed to contact
within the jurisdiction of the United States according to the verge Apple has a long history in the Chinese market, has a huge customer base in China, and almost all of Apple’s important manufacturing and assembly partners are in China. Trump’s ban may not only force apple to remove wechat from the app store, which will not only destroy Apple’s smartphone business in China, but also fundamentally change the way Apple makes and sells new products in the future.
as analyst Ben Thompson pointed out in 2017, “in any other country, there is nothing that can be benchmarked with wechat. Wechat is usually compared with the combination of Facebook, that is, Facebook, Messenger and whatappp, all of which are about communication and waste of time. In addition, wechat can also be used to read news, take a taxi, pay, obtain government and commercial resources, etc. These functions and functions make wechat your mobile phone. In a broader sense in China, your mobile phone is everything. ”
the verge reports that an iPhone without wechat can not serve the mobile phones of hundreds of millions of Chinese users, who are the basis of Apple’s current iPhone business model. If Apple can no longer install wechat on the iPhone because of Trump’s ban, its Chinese business will almost certainly evaporate overnight.
Apple has been successful in the past because of the closeness of its platform. However, a more open system similar to Google’s Android system can allow users to install wechat without the permission of the platform. This is not an ideal choice for apple.
in addition, Trump’s wechat / Tencent ban may have a greater impact on apple. At present, under the influence of escalating trade friction between China and the United States, Apple has to pay 25% tariff on five parts of its Mac Pro desktop, and% tariff on its charger, homepod smart speaker and airpods wireless. A 15% increase in tariffs on iPhones means an increase of $150 in the cost of an iPhone.
apple is unlikely to move its manufacturing plants elsewhere. In 2005, China novel coronavirus pneumonia, which was introduced by COO Tim Cook in 2005, adopted “instant” production reform, reducing excess stock and continuously launching new products, which led apple to rely heavily on Chinese manufacturers such as Foxconn. They are extremely important to apple, so that when the new crown pneumonia outbreak causes these factories to stop production, the entire supply chain of apple is affected, and may even lead to autumn 2020. Days of delays in the iPhone 12 product line.
China’s importance to Apple can’t be overstated. The economist pointed out earlier in 2020 that Apple’s total revenue in China in 2019 was $44 billion, more than any other US company. China is already the third largest contributor to Apple’s revenue, accounting for about 15% of Apple’s revenue in the third quarter of 2020. In the United States and Europe, Apple’s iPhone and MAC market share has stagnated, while the Chinese market still has huge room for growth. At present, Apple’s market share in China’s smartphone market is only 9%, dominated by Huawei, vivo, oppo and Xiaomi.
and it’s not just iPhone sales. Chinese users spent $1.53 billion on Apple’s app store in April 2020 alone, excluding subscription services such as icloud and apple music.
under the leadership of Tim Cook, Apple’s success in recent years largely depends on its expansion in China, not only as a manufacturing center, but also on its huge consumer base. Trump’s wechat ban may shake this once solid foundation, damaging not only Apple’s largest customer base, but also Apple’s manufacturing capabilities.