Although the Trump Administration has not been characterized, in these four years, for being especially predictable, the Executive order that the president signed against WeChat It is, without a doubt, one of the most unusual events in the final stretch of the legislature. One that can be accompanied by a vast number of consequences.
The document revealed the United States’ intentions to ban any US business from trading with WeChat. A measure that goes beyond the Chinese application, but could directly affect companies that, like Apple, they distribute it through their app store.
However, nothing is clear yet. On the one hand, not all the implications of the Order signed by Donald Trump, which must be met by state-owned companies as of next September; on the other, the pressure exerted between now and then by these firms – as it is already running – could turn the situation around again.
WeChat, much more than an application
Despite the fact that the decision to put a stop to WeChat may seem trivial in the eyes of the West – less important, even, than the equivalent action that is intended to be imposed against the popular social network TikTok-, The reality is quite different.
WeChat has established itself over the years as the Essential app for those who live in China. Far has been its use as a mere social network or messaging app, mutating into an entire ecosystem where payment options are housed in shops and between individuals, transport or hotel reservation services, reading news and even renting a house. It is the epicenter of virtual social day-to-day in the country.
Given this raises the fear that the aforementioned Executive Order will lead to the impediment of this application to remain in the App Store. Apple could be forced to unilaterally suppress it from its application store in the United States, causing considerable chaos among users.
The scenario that arises, if a ban does go into effect, it would leave many users without one of the most valuable applications. Zheng Chulian, a North American resident with a family in China, uses WeChat to “talk to her friends and family.” “It is the default app, because everyone there uses it,” he explains to this medium.
This service is not only used to communicate, as mentioned above, and Chulian says that he uses it to “exchange money or buy products instantly with the bank integrated in WeChat.”
Thus, the shadow of the possible blockade is posed as a a major problem for hundreds of thousands of people – more than a million in the United States – which could be several million if the blockade extends beyond the country ruled by Trump.
Blockade: how far?
One of the intriguing issues raised by the text signed by the American leader is the scope of the Order. While removing WeChat from the North American App Store would have little impact, doing the same on its Chinese counterpart could be the equivalent of a catastrophe for the Cupertino company.
This is expressed by the renowned analyst of the sector Ming-Chi Kuo, who is clear when stating that such a measure would “sink” iPhone sales in China. “We estimate global shipments of iPhone will decrease by 25% to 30%. Global shipments of other Apple hardware products, including AirPods, iPad, Apple Watch and Mac, will decrease by 15% to 25%” .
A position with which Junhui, a university professor in Shanghai, agrees, “If Apple removes WeChat from the App Store, no one in China will buy an iPhone,” he asserts. An opinion that is easy to quantify if it is assumed to be shared among the more than one billion users of one of the company’s smartphones on Chinese soil.
Daniel Ives, an analyst at Wedbush Securities, calls for optimism. Despite the fact that both countries are mired in a “technological Cold War”, according to Hipertextual don’t expect to see revenge actions against Apple by China. His position as a “strategic employer” and his weight as a global firm, he says, shield the Cupertino corporation from what many have been predicting for months. It also does not believe that WeChat will be withdrawn from the Asian App Store, thus minimizing the possible adverse effects on the business.
Both Apple and other US companies have been reluctant to the government’s action against platforms like the aforementioned. The relevance of China in the global market is clear, and no one wants to leave room for another competing company to take advantage of the gap.
In the last quarterly results reported by Apple, for example, the technology company reported revenues of 9.329 million dollars from China. It represents slightly more than 15% of what is generated by the firm during that period.
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