Tencent's WeChat is out to Challenge Apple's App Store and that's Bound to Hurt Apple's Services Business in China
A financial website is reporting this morning that a recent update of the WeChat app from Chinese tech juggernaut Tencent could have "serious ramifications" for Apple. One market analyst told CNBC that "With WeChat moving towards solidifying the mini-programs position, there could be serious ramifications for Apple's service business." In other words WeChat is moving in to challenge Apple's App Store services business just as Apple turns to services to bolster future revenue.
While no analyst believes that WeChat will be able to challenge the App Store's success in games in the short run, other apps will be challenged. The idea is to provide start-up developers a platform without having to pay Apple a 30% cut in profits.
TuanAnh Nguyen, an analyst at technology research firm Canalys, said in an email to CNBC that "Given their ubiquity across both Apple's iOS and Google's Android mobile operating systems, "superapps" such as WeChat have "made the Apple ecosystem lock-in much weaker" in China in comparison to other parts of the world, resulting in an erosion of the competitive advantage of the Cupertino-based tech giant's hardware."
Mengmeng Zhang, a Beijing-based analyst at Counterpoint Research added that "WeChat is your Facebook, your credit card, your Uber, your Amazon altogether. Some even say China's operating system is WeChat, not (Google's) Android or (Apple's) iOS."
For more on this, read the full CNBC report here.