WeChat to be Removed from Apple App Store? Tencent and Apple's "Apple Tax" Dispute

WeChat to be Removed from Apple App Store? Tencent and Apple's "Apple Tax" DisputeTencent and Apple have been engaged in ongoing negotiations regarding the App Store's commission fees, with the potential for a breakdown in talks. The most serious consequence could be WeChat being removed from the Apple App Store, rendering new iPhone 16 series phones unable to use WeChat

WeChat to be Removed from Apple App Store? Tencent and Apple's "Apple Tax" Dispute

Tencent and Apple have been engaged in ongoing negotiations regarding the App Store's commission fees, with the potential for a breakdown in talks. The most serious consequence could be WeChat being removed from the Apple App Store, rendering new iPhone 16 series phones unable to use WeChat. This dispute stems from Apple's accusations against WeChat's mini-programs, alleging that they bypass Apple's payment channels, allowing users to complete payments through external payment environments and thus avoiding the 30% commission. Apple is demanding Tencent close the loopholes in WeChat and other apps, preventing them from guiding users towards external payment methods, or face the removal of new app updates from the App Store.

Previously, during Tencent's earnings conference call, Ma Huateng acknowledged that the 30% commission charged by app stores is a significant burden. More importantly, the 30% commission in the Chinese market is currently the highest globally, compared to the 17% commission in the European Union. For a company of Tencent's size, this is undoubtedly unfair.

Negotiations between Tencent and Apple are ongoing, but if they ultimately fail, how would we cope with the inability to use WeChat on Apple iPhones?

Looking at the factual situation in China, iPhones currently account for approximately 21.7% of smartphone users, representing around 250 million users. This user base is one that Tencent cannot afford to abandon. However, WeChat's removal from the Apple App Store does not necessarily equate to giving up on these users.

Firstly, for those iPhone users who have already installed WeChat, they can continue using it normally, albeit without access to updates. This, however, will not impact usage in the short term. A few months should be enough for Tencent and Apple to reach a solution.

However, the situation is more complex for those who wish to acquire a new iPhone. If the iPhone 16 series cannot use WeChat, its appeal to consumers will be significantly diminished, potentially leading to a lack of interest. In the Chinese market environment, WeChat is a fundamental application, with many app ecosystems built around it. A phone without WeChat is almost worthless, at least for mass users who rely on a single device.

Of course, iPhones without WeChat can still offer value, such as functioning as live streaming devices, showcasing their powerful imaging capabilities. However, it is undeniable that iPhones without WeChat will become difficult to use in most scenarios.

Some might believe that if WeChat is removed from the Apple App Store, other social applications will quickly fill the void. However, this notion is unrealistic in the Chinese market. Even if you personally can do without WeChat, your colleagues, clients, family, and friends are using it, ultimately making WeChat a necessity.

A truly feasible solution would be to acquire an Android backup phone, using two devices to fulfill what previously could be achieved with one, but this undoubtedly introduces significant inconvenience. The Chinese market offers numerous affordable and practical Android phones, and in actual usage, the Android backup phone could gradually become the primary device, ultimately leading users to abandon iPhones.

This dispute between Tencent and Apple seems somewhat similar to the past "3Q War," with the final outcome likely involving both parties taking a step back and maintaining the status quo. Moreover, WeChat has a fallback option: it can close the Apple Pay entry point for mini-games, switching to a web-based alternative. While inconvenient, it would at least allow continued use.

Ultimately, the dispute between Tencent and Apple revolves around the percentage of commission charged by Apple. People have already expressed dissatisfaction with the Apple tax rate, especially since commission rates in other regions are decreasing. WeChat's threat to leave the Apple App Store is too extreme and unlikely to occur. If Apple truly took this step, it would be akin to withdrawing from the Chinese mobile market.