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Apple's iPhone Shipments Could Plunge 30% if WeChat Is Banned: Analyst

In the worst case scenario, Apple could take a 25-30% hit to its global iPhone shipments if WeChat is banned entirely from the App Store.

If President Trump's threat to ban WeChat were enacted, Apple could lose a major chunk of its iPhone sales according to one analyst. 

Writing on in a research note, analyst Ming-Chi Kuo of TF International Securities estimated that in a worst-case scenario -- in which WeChat is banned entirely from Apple's App Store, in every region -- Apple's iPhone shipments could take a 25% to 30% hit.

That estimate reflects WeChat's status as an essential "super-app" for its heavy  users, most of whom are concentrated in China. In addition to messaging and calls, WeChat serves as a platform for everything from payments and ridehailing to productivity and ecommerce. And removing it from the App Store would kill any appeal of owning an iPhone for heavy WeChat users, said Kuo. 

Apple shares closed 1.45% higher on Monday to $450.91.

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"Since WeChat is very critical to Chinese users, integrating communications, payments, e-Commerce, social software, news reading, and productivity functions, we believe that the move will tank ‌iPhone‌ shipments in the Chinese market," he wrote. "We estimate that global ‌iPhone‌ shipments will decline by 25–30%. Global shipments of other Apple hardware products, including Airpods, iPad, Apple Watch and Mac will decline by 15–25%." Kuo later clarified to MacRumors that the 25%-30% hit was indeed in reference to global iPhone shipments.

Late last week, Trump signed an executive order saying that within 45 days, U.S. persons and companies will be barred from making "transactions" with Tencent-owned WeChat and ByteDance-owned TikTok. But the order itself did not define what constitutes a "transaction," nor did it provide any guidance for platform operators such as Apple on what compliance with the order would entail. 

China accounts for about 15% of Apple's overall revenue in a typical quarter, and wiping out WeChat could quash iPhone sales almost entirely in China and for other customers around the world who rely on WeChat. WeChat's monthly active user base is estimated at 1.2 billion worldwide. 

In a more optimistic scenario, in which WeChat is banned in the U.S. only, Kuo estimates a 3-6% hit to global ‌iPhone‌ shipments, and less than 3% hit to other Apple products.