Price tag on WeChat could cost Apple dearly

Apple's response to widespread rumors that the new iPhone operating system might not continue supporting the popular chatting app WeChat, or that the app might even no longer be available on Apple Store, has done little to address people's concerns. Apple said recently that it cannot comment on the rumors until Apple and Tencent talk it out.

The public's concerns are understandable given that according to market survey institution QuestMobile, iPhone users number over 250 million in China, while the number of active WeChat users exceeds 1 billion on the Chinese mainland alone. For most Chinese users, WeChat is a convenient app that integrates contact list, messaging, calling and daily entertainment options at one place for free.

The large size of WeChat is a key factor why so many businesses, be they official account holders or livestreamers, have made money on the platform. It's with the support of WeChat that Tencent earned 609 billion yuan ($85.6 billion) in business revenue in 2023; even its startup product QQ has 571 million users now.

However, even Tencent dare not turn WeChat into a paid app for fear of losing users. In some sense, collecting money from WeChat users would not be a profitable move because an imagined annual user fee of 10 yuan would only help it rake in more than 10 billion yuan, which might be far less than the losses that loss of users will cause. That's why Tencent has several times clarified against relevant rumors, stressing that it was not turning WeChat into a paid app.

That is a lesson Apple can learn. In the age of social media, users are the biggest resources and any software or hardware developer that has the biggest number of users wins. Instead of insisting on its 30 percent "Apple tax" or other fee it can collect on such huge-size apps in a nation with a population 1.4 billion, Apple might need to think creatively so that its users remain loyal for it to make money in other, more sustainable ways.

Latest data from technological industry research institute RUNTO show that while Apple tablets remained the largest selling in China in July its sales registered a 21 percent dip year-on-year. Market survey agency Canalys, too, found that in the second quarter of 2024, iPhone sales were ranked second among all brands, which shows a downward trend.

Unless Apple changes its attitude, this downward trend might continue.