Apple Reaches Deal to Take Billions of Dollars in China's WeChat

[MacRumors]

Apple has reached a new agreement with Tencent that will allow the company to process payments and collect a 15% commission on purchases made inside WeChat mini games and mini apps on the iPhone, establishing a major new revenue stream in China after over a year of negotiations, according to Bloomberg.

Under the arrangement, Apple will begin handling in-app payment processing for qualifying mini apps and mini games distributed inside WeChat, China's dominant all-purpose mobile platform. Developers participating in the system will need to adopt specific Apple software requirements, including a feature that allows parents to share a child's age range.

Unlike users in the rest of the world, most Chinese iPhone users do not access services by downloading separate apps from the App Store. Instead, they use WeChat as a single interface for services, utilities, and entertainment. These functions are powered by a vast network of mini apps contained entirely within WeChat.

Purchases made through these mini apps have historically not generated App Store commission because many developers direct users to external payment systems. As a result, Apple's new agreement gives the company a foothold in a major segment of Chinese mobile payments from which it previously received no revenue.

While the new 15% commission is half of Apple's standard 30% rate for many App Store transactions, Bloomberg estimates that the size of the WeChat ecosystem makes the agreement potentially worth billions of dollars to Apple. The agreement is expected to be disclosed publicly by the companies at a later date.


Article Link: Apple Reaches Deal to Take Billions of Dollars in China's WeChat

 

[Stike]

And now we are wondering what Tencent is getting from Apple in return...

 

[hieranonymous]

I’m surprised Tencent agreed to this. Great news for Apple’s bottom line.

 

[turbineseaplane]

This is such an odd story.

So it's a payment processing deal?
For Apps distributed via WeChat (not the App Store)

...and at 15%!?

This feels like there's some big component we are not being told about.

 

[840quadra]

I am sure this will further delay Apple having (if it was ever possible) a full removal of Manufacturing in China.

 

[turbineseaplane]

As a result, Apple's new agreement gives the company a foothold in a major segment of Chinese mobile payments from which it previously received no revenue.

While the new 15% commission is half of Apple's standard 30% rate for many App Store transactions, Bloomberg estimates that the size of the WeChat ecosystem makes the agreement potentially worth billions of dollars to Apple.

I miss the Apple that was focused on amazing hardware, with polished software to match.

 

[bmark]

This is a big deal for Apple since WeChat is essential for daily life in China. There is no WhatsApp or Facebook.

 

[Harmonious Zen]

I am sure this will further delay Apple having (if it was ever possible) a full removal of Manufacturing in China.

Yep. WeChat is the de facto app for payments, messaging ... basically everything in daily life in China. Which means there's a close tie-up with the government even if the company itself isn't government owned. You can bet that they're looking at ways to give themselves additional leverage

 

[MilaM]

To me it sounds like Apple is not replacing WeChat's payment system. Rather Apple customers will have the opportunity to choose Apple's payment processing in some games if they prefer that.

 

[Love-hate 🍏 relationship]

what I find extremely hypocritical and beyond nasty is how compliant apple is with china , and didn't hesitate to ban and remove homosexual dating apps just a few days ago, yet fights tooth and nail when it comes to giving a wee bit of openness in the EU, much to the chagrin of US apple users , who, for some reason, see it with a bad eye.

there was a lawsuit and they had to pay roughly 100M (think it started in france), where they proved siri was listening to you , where apple used that data, and also sold it to third party contractors I believe.

they got a deal to push google by defaut in safari and spotlight web engine.

they don't give a flying **** about freedom, ecology, and arguably privacy and advertising. yet, perhaps in some sort of cognitive dissonance, the vast majority of the userbase seems to believe that apple is nice and trustworthy. I would admit they're probably the least worst of the devils, though it seems to be more of a demeanor they're showing thanks to heavy marketing tactics , nay brainwashing. go figure

 

[contacos]

Damn, how many Labubu did Tim agree to buy in exchange

 

[Crzyrio]

what I find extremely hypocritical and beyond nasty is how compliant apple is with china , and didn't hesitate to ban and remove homosexual dating apps just a few days ago, yet fights tooth and nail when it comes to giving a wee bit of openness in the EU, much to the chagrin of US apple users , who, for some reason, see it with a bad eye.

I am confused by what your point is. No one here likes what apple is doing in China, but without China there is no Apple.

In China there is no arguing, you do it or your out. Fortunately Europe and North America are more democratic allowing for open dialogue. The back and forth allows for more balanced decisions.

 

[clg82]

they don't give a flying **** about freedom, ecology, and arguably privacy and advertising. yet, perhaps in some sort of cognitive dissonance, the vast majority of the userbase seems to believe that apple is nice and trustworthy.

I was giong to say, if you ask anyone on these forums they go above and beyond to scream from the mountain tops that Apple isn't doing what the competitors are with privacy etc....it's asinine to think they wouldn't, even if it isn't as extreme. "I'll never use Google blah blah blah" as their iPhone sits 3 feet from them listening to every word.

 

[Love-hate 🍏 relationship]

I am confused by what your point is. No one here likes what apple is doing in China, but without China there is no Apple.

In China there is no arguing, you do it or your out. Fortunately Europe and North America are more democratic allowing for open dialogue. The back and forth allows for more balanced decisions.

my point speaks to a broader, systemic issue . while I agree that arguing with china is much harder, perhaps impossible even, the other points are proof that apple isn't exactly clean . you musn't take those points as isolated problematics, but rather see what they depict as a bigger picture , and the underlying hypocrisy , or the lack of congruence in the image they're showing, and the actions they effectively take .

 

[DrKarl]

Yep. WeChat is the de facto app for payments, messaging ... basically everything in daily life in China. Which means there's a close tie-up with the government even if the company itself isn't government owned. You can bet that they're looking at ways to give themselves additional leverage

Not true at all. Alipay is THE de facto payment app in China. WeChat Pay also offers payment options but Alipay dominates. Having used both recently in China...Alipay is also the easiest to use. Both support 'mini apps', but different ones. This story about Apple's 15% is about paid mini apps, vs paid services. For example, in China Didi is their version of Uber and Alipay has a Didi mini app inside of it... that then lets you use Didi car and pay for rides with whatever payments are already linked to your Alipay without having to set up a Didi account. The Didi mini app is free ... so if Apple were to cut a deal with Alipay, they would get zero for Didi. WeChat has similar free apps - that then have paid services. I assume Apple wouldn't get a cut there.

 

[dmr727]

I don't think people truly believe Apple is nice and trustworthy, but rather they're the lesser of the other evils. Everyone is collecting data, but there's supposedly a difference with what's being done with it. Whether that's actually true or not...🤷

 

[the future]

what I find extremely hypocritical and beyond nasty is how compliant apple is with china , and didn't hesitate to ban and remove homosexual dating apps just a few days ago, yet fights tooth and nail when it comes to giving a wee bit of openness in the EU, much to the chagrin of US apple users , who, for some reason, see it with a bad eye.

there was a lawsuit and they had to pay roughly 100M (think it started in france), where they proved siri was listening to you , where apple used that data, and also sold it to third party contractors I believe.

they got a deal to push google by defaut in safari and spotlight web engine.

they don't give a flying **** about freedom, ecology, and arguably privacy and advertising. yet, perhaps in some sort of cognitive dissonance, the vast majority of the userbase seems to believe that apple is nice and trustworthy. I would admit they're probably the least worst of the devils, though it seems to be more of a demeanor they're showing thanks to heavy marketing tactics , nay brainwashing. go figure

I was giong to say, if you ask anyone on these forums they go above and beyond to scream from the mountain tops that Apple isn't doing what the competitors are with privacy etc....it's asinine to think they wouldn't, even if it isn't as extreme. "I'll never use Google blah blah blah" as their iPhone sits 3 feet from them listening to every word.

Two prime examples of the virulent lazy cynicism that is as smug as it is wrong (and, obviously, intellectually lazy). Apple is very different from Google, Meta et al. Doesn‘t mean they don‘t make mistakes, but their DNA is worlds apart.

 

[2638se]

what I find extremely hypocritical and beyond nasty is how compliant apple is with china , and didn't hesitate to ban and remove homosexual dating apps just a few days ago, yet fights tooth and nail when it comes to giving a wee bit of openness in the EU, much to the chagrin of US apple users , who, for some reason, see it with a bad eye.

there was a lawsuit and they had to pay roughly 100M (think it started in france), where they proved siri was listening to you , where apple used that data, and also sold it to third party contractors I believe.

they got a deal to push google by defaut in safari and spotlight web engine.

they don't give a flying **** about freedom, ecology, and arguably privacy and advertising. yet, perhaps in some sort of cognitive dissonance, the vast majority of the userbase seems to believe that apple is nice and trustworthy. I would admit they're probably the least worst of the devils, though it seems to be more of a demeanor they're showing thanks to heavy marketing tactics , nay brainwashing. go figure

Are you serious? China didn't force apple to remove their 30% commission (for now) and never forced apple to change their products' design in any way. It's strictly business.
EU on the other hand constantly meddles with how Apple makes its products. I don't want to get political but EU is not a "bastion of justice" in anyway (You just robbed Nexperia for no reason). Seriously, Why do Europeans love peddling themselves so much?

 

[turbineseaplane]

I do like the headline writing here MR, bravo!
Feels just about right to me.

"Apple reaches deal to take billions..."

 

[surferfb]

there was a lawsuit and they had to pay roughly 100M (think it started in france), where they proved siri was listening to you , where apple used that data, and also sold it to third party contractors I believe.

Just to be clear, what happened was that it came out Apple’s contractors ("third parties") were reviewing small samples of Siri recordings without users’ clear knowledge, as they had been hired to improve the "Hey Siri" functionality. When it came out, Apple halted the program, made it opt-in, and yes faced a lawsuit that it eventually settled (without admitting wrongdoing), while reiterating that recordings were anonymized and used only to improve Siri’s accuracy (which obviously you don't have to believe, but I see no reason to doubt them on it).

In other words, they were not selling the data to third parties (in fact, Apple was paying the "third party", not the other way around). They just had a contractor do the grunt work of analyzing Siri recordings to improve the feature rather than have Apple employees do it.

 

[Reverend Benny]

Are you serious? China didn't force apple to remove their 30% commission (for now) and never forced apple to change their products' design in any way. It's strictly business.
EU on the other hand constantly meddles with how Apple makes its products. I don't want to get political but EU is not a "bastion of justice" in anyway (You just robbed Nexperia for no reason). Seriously, Why do Europeans love peddling themselves so much?

Europeans??? Europe is not a country like the US and not every country is a member of the EU.

 

[Unregistered 4U]

And now we are wondering what Tencent is getting from Apple in return...

If I had to guess, Apple were able to show them how, much like in other parts of the world, folks on Apple devices spend more on digital content when they’re able to use Apple’s IAP. It’s a new revenue stream for Apple, but very likely a hugely lucrative opportunity for Tencent as well.

 

[Unregistered 4U]

Are you serious? China didn't force apple to remove their 30% commission (for now) and never forced apple to change their products' design in any way. It's strictly business.
EU on the other hand constantly meddles with how Apple makes its products. I don't want to get political but EU is not a "bastion of justice" in anyway (You just robbed Nexperia for no reason). Seriously, Why do Europeans love peddling themselves so much?

Yeah, in this and other ways, China, with its strong homegrown tech economy, sees Apple as “just another entrant”. Regions WITHOUT any tech to speak of sees Apple as “of strategic importance”. Yes, it’s something that has strategic importance, but not SO important that creation of a regional solution is warranted.

 

[BENCHPRESS]

Holy crap this is huge for Apple since there are around 1.3b+ (yes, billions) daily users on Wechat.

 

[Unregistered 4U]

Holy crap this is huge for Apple since there are around 1.3b+ (yes, billions) daily users on Wechat.

Yeah, but it just affects those folks that are using Apple devices. So, likely somewhere around 200 million folks, give or take. Still a lot, just not 1 billion lot.