The known-Analyst Ming-Chi Kuo believes US sanctions on WeChat will have a significant impact on Apple’s sales. In an investor report available to MacRumors, Kuo mainly predicts a significant drop in iPhone sales. But other products from the Cupertino-based company are also said to suffer from a ban on the Chinese messaging app.
However, Kuo is considering two different scenarios, as he does not know what scope a US ban will have. According to him, it is unclear whether Apple only needs to remove the WeChat app from the US version of the App Store or worldwide – including in China.
“As WeChat has become an everyday necessity in China, integrating features such as messaging, payments, e-commerce, social networking, news reading and productivity, we believe that shipments of Apple hardware products to the Chinese market will decrease significantly,” cited MacRumors from the report. “We estimate annual iPhone shipments will decrease by 25-30%.”
Should the US sanctions only affect the US market, Kuo expects Apple’s smartphone sales to decline by 3 to 6 percent. On other products like AirPods,, Apple Watch and even Macs, a WeChat ban should also have an impact – depending on the scenario, Kuo expects a minus of less than three percent or up to 25 percent.
MacRumors, however, points to a possible contradiction in Kuo’s analysis. In the June quarter, Apple achieved only around 15 percent of its total sales in China. Since a ban primarily affects the Chinese market, Kuo’s estimate of a drop in sales of up to 30 percent is incomprehensible.
Kuo advises investors to reduce their stake in certain Apple suppliers, including LG Innotek and Genius Electronic Optical. However, he also admits that the ban threatened by US President Trump in his executive order will not come into force until September 20 and that there will be enough time until then to change or specify the sanctions.