Us blocked wechat leads to chain effect: China’s iPhone shipment may plummet by 30%

As iPhone sales in China increased to 32% in the second quarter, the US ban on wechat is likely to end < / P > < p > on August 7, U.S. President trump signed an executive order to accuse wechat and its parent company Tencent on the ground of protecting national security, prohibiting American enterprises and individuals from trading with Tencent in the future. As soon as the ban was issued, the market was shaken immediately. In addition to Tencent’s sharp fall of more than 10%, apple, whose stock price has risen by more than 50% since this year, also fell by 2.27% and its market value has shrunk by 43.8 billion US dollars, making it the US enterprise with the most joint damage under the wechat ban. At the same time, around Apple’s industrial chain, the share prices of enterprises fluctuated one after another on the day of the ban. Apple’s distributor in China, e.g., and huanxu Electronics Co., Ltd., both fell to A-share limit. At the same time, Xinwei communications, lens technology, BYD and other partners also fell sharply. < / P > < p > a number of market analysis institutions also gave a quick interpretation of the correlation. Because of the worry that after the wechat is disabled, the app store of iPhone will no longer be able to provide wechat download, many iPhone users in China may no longer be able to use this mobile phone software with nearly 1 billion users in China, which will also affect the willingness and tendency of Chinese users to continue to purchase Apple mobile phones in the future. However, as of press release, Apple has not commented on the fate of wechat in the app store. At the same time, the reporter of China business daily also asked the person in charge of apple in China, but the other party did not give a response. However, a person close to Apple told reporters that apple is still waiting for further explanation from the U.S. government because the current US ban on wechat has not given clear implementation requirements. But the Chinese market accounts for about 20% of iPhone sales, and taking off wechat is certainly not the choice Apple executives want to face. At the same time, according to the source, a number of American companies with business in China, including apple, have recently communicated with the White House and introduced in detail the possible adverse effects of banning wechat on their own businesses. < / P > < p > although the object of this administrative order is only targeted at wechat, it is still unknown how wide the scope of the ban will be and how many companies will be involved in the ban, due to the “vague” wording used by the White House. The reporter inquired the official website of the White House and found that most of the ban was devoted to describing the “threat” posed by wechat to the national security of the United States, while in terms of punishment measures, it only explicitly mentioned that “no US entities or individuals are allowed to conduct wechat related transactions with Tencent and its subsidiaries”. However, the administrative order does not give a clear definition of what “relevant transaction” is. An analyst told reporters that it is more likely that in the future, domestic enterprises and individuals in the United States will be banned from using wechat red packets, wechat transfer, wechat payment and other financial related businesses involving money in the United States. Meanwhile, the advertising and marketing business of American enterprises on wechat platform may also be affected.

but it is also necessary for US official account to explain whether the US companies operating outside the United States, including Apple stores promoting WeChat and other Tencent App, are also in the definition of the “transaction” and whether Apple’s reward for WeChat public numbers is going to stop. According to the original terms, the US Department of commerce is responsible for defining “prohibited transactions” after 45 days. At the same time, the White House said that US Commerce Secretary Wilbur Ross will issue relevant implementation rules before September 20, but this also means that before this, various doubts in the industry about the extent to which American enterprises, including apple, will “cut” from wechat can not be confirmed for the time being. However, the anxiety caused by this uncertainty is fermenting. A person from a domestic Android mobile phone manufacturer told reporters that if the cooperation between Apple App store and wechat can be regarded as a “transaction” prohibited by the U.S. government, the cooperation between Android App store and wechat will also be banned. Although the openness of Android system allows users to download applications in third-party stores, this “illegal” definition itself means that the Android system architecture may be “decoupled” from wechat, which may cause security vulnerabilities and threats in the future, the source said. < / P > < p > the person said that a more powerful means than “off the shelf” is to shut down the servers deployed by wechat in the United States. It is reported that as many functions such as video call need the support of high-speed network, Tencent has deployed data centers in many countries around the world, so that long-distance content transmission can be faster. Once the US server is shut down, US wechat users will have to connect with remote servers in China, which will greatly affect the user experience. < p > < p > it is reported that a few days ago, when the official ban of wechat in India, Tencent was forced to shut down its servers in India, causing wechat users in India to reluctantly send and receive text messages. Although the administrative order of the United States did not provide for this, the person believed that the purchase of deployment server must involve “transaction”, which may also be one of the reasons for the US side to adopt in the future. < / P > < p > the sudden arrival of the wechat ban has cast a shadow on the prospects of iPhone in China, which is in the “recovery period”. Due to the closed nature of IOS system, once wechat is removed from the app store, Chinese users will not be able to use wechat on iPhone. < / P > < p > just a week ago, market research firm counterpoint released Apple’s latest channel sales (i.e., the number of iPhones sold to Apple’s retail partners) in the second quarter of 2020, which was set at 7.4 million, up 32% year-on-year. Another latest data released by cinnor research in Shanghai also showed that iPhone sales in China reached 13 million in the second quarter, up 62% year-on-year. < / P > < p > this achievement also announced that Apple had become the fastest growing mobile phone manufacturer in China’s smartphone market in the second quarter of 2020, which was particularly prominent against the background that the global iPhone sales volume in the second quarter of 2020 was affected by the epidemic and fell by 25% year-on-year. Obviously, the Chinese market is becoming more and more important to apple. This may be why cook called out at a recent earnings conference that “Apple will seek growth in a broader market outside the United States in the future.”. Apple’s sales in the second quarter were nearly $60 billion, with sales in Greater China up 2% to $9.33 billion. At the same time, as the “standard” app of domestic smart phones, wechat, which integrates the functions of information, payment, e-commerce, social networking, news reading and productivity, is undoubtedly a necessary application for domestic mobile phone users. According to the report on Market Research and investment strategy consultation of China’s wechat small program industry from 2020 to 2025, the combined monthly active accounts of wechat and wechat reached 1.2025 billion by the first quarter of 2020. < / P > < p > in this context, according to the proportion of IOS users provided by the authoritative market research and consulting agency Kantar worldpanel, the number of Apple users in China using wechat is close to 172 million. If such a huge market is lost, it will undoubtedly bring a huge blow to apple, which relies on the Chinese market. < / P > < p > an online user initiated by Netease with a total of 856000 participants will choose to change their iPhone in order to use wechat, while less than 6% will choose to uninstall wechat. Another research report from China’s Tianfeng securities directly predicts that if the ban is implemented, the annual shipment of iPhones will be reduced by at least 25% to 30%, while that of other hardware devices, such as airpods, iPad, apple watch and MAC, will drop by 15% to 25%. Zhang Yi, CEO and chief analyst of AI media consulting, told reporters that once the “off shelf” is determined, the loss caused by the ban is much higher for apple than Tencent. “At present, Tencent’s business share in the United States is not large, but without the Chinese market, apple ecology will lack an important part of profits and revenue.” Zhang Yi said that according to the survey conducted by AI media, about 80% of users will give up using iPhone if they can’t use wechat. Guo Mingji, an analyst at Tianfeng international securities, said that blocking wechat had the greatest impact on the iPhone among Apple’s hardware products. The optimistic result is that the app store will only be removed from wechat in the U.S., which will lead to a 3% – 6% decline in iPhone shipment; however, if the app store will be removed from wechat worldwide, the annual iPhone shipment will decline by 25% – 30%. However, with the election approaching, trump, who is seeking re-election, will take more radical measures to canvass votes. Therefore, he suggested that investors should temporarily reduce the allocation of apple supply chain stocks to reduce the risk. < / P > < p > with the 45 day ban approaching, the stress response of the industrial chain led by apple is extending, especially in the field of terminal, enterprises of China and the United States are becoming the victims of the ban. < / P > < p > two days after the White House issued the wechat ban, Microsoft’s official website updated the service agreement, stating that if Microsoft fails to perform or delays in performing its obligations due to force majeure, Microsoft will not assume any responsibility or obligation. For a while, this dynamic was quickly interpreted by the industry as “Microsoft will not be responsible for the loss of windows supply to the Chinese market.”. < / P > < p > although Microsoft quickly refuted the rumors, according to the reporter’s understanding, some domestic PC manufacturers were indeed very nervous on that day, and even inquired about the authenticity of the news. According to the latest statistics of Baidu Traffic Research Institute, windows accounts for nearly 93% of users in the domestic market. < / P > < p > “since companies like Tencent have been sanctioned, it is difficult to guarantee that the United States will not do more thoroughly.” A dealer who is mainly responsible for the PC agency channel of North China office told the reporter that due to the popularity of smart phones and tablets, the main market of PC has turned to the office field, and many domestic enterprise customers pay more and more attention to software copyright and service when purchasing. Therefore, once Microsoft and American software companies represented by windows cut off the supply, it will obviously be withered again and again The shrinking PC market has hit hard. < p > < p > just a week before the wechat ban, the US State Department launched the most stringent “net net plan” in history, announcing that it would “decouple” from Chinese technology enterprises in the fields of operators, software applications, cloud services and submarine cables. An executive of a domestic head communication equipment manufacturer told reporters that although the United States has launched intensive crackdowns on Chinese technology companies since last year, the intensity of the crackdown is unprecedented, which will also make many Chinese and American enterprises that have already cooperated or are ready to cooperate with each other “to flinch.”. < / P > < p > and on a larger scale, the butterfly effect of the US ban on wechat also puts great pressure on many American enterprises. Many American companies in China may face the risk of losing a large number of customers due to their heavy reliance on wechat, Reuters quoted experts as saying. < / P > < p > is obvious