Apple won’t be forced to boot messaging app WeChat out of the App Store in China, Bloomberg claims in a weekend report.
According to the publication, the Trump administration is “privately seeking to reassure” American companies like Apple that they can still do business with WeChat in China. Two weeks ago, Trump ordered a U.S. ban on WeChat, although the details were not clarified.
The report notes that:
“In recent days, senior administration officials have been reaching out to some companies, realizing that the impact of an all-out ban on the popular app, owned by China’s Tencent Holdings Ltd., could be devastating for U.S. technology, retail, gaming, telecommunications and other industries, people familiar with the discussions said.
Apple is one of the companies that could stand to lose the most from the WeChat ban because China represents a fifth of its sales. Apple also relies on China for a large chunk of its manufacturing, which could be affected if the Chinese government decided to retaliate.”
The report adds that officials do not expect WeChat to “completely vanish” in the U.S. However, the goal is to prohibit any downloads or updates of the app in America.
It will still be accessible to people visiting from other countries, who arrive in America with WeChat already installed. It will also be available to those who have already downloaded it in the U.S. Over time, however, the lack of updates will render it unusable.
WeChat is crucial in China
TF International Securities analyst Ming-Chi Kuo recently said kicking WeChat out of the App Store could drive down worldwide iPhone shipments by up to 30%. A separate report suggested that a ban could cost Apple more than $25 billion per year.
That is because of how crucial WeChat is to the smartphone experience in China. WeChat is more like an operating system than an app. It also functions as a social network, a replacement for email, a mobile payments service, and more.
Along with WeChat, Trump has also targeted video-sharing app TikTok. In both cases, the Trump administration cites security concerns as its reason for clamping down on the popular Chinese apps.