WeChat helps Apple rack up bonus points in China

Sun Sep 7, 2014 5:20pm EDT
 
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By Paul Carsten

BEIJING (Reuters) - Apple Inc has a lot for which to thank people like Deng.

A Beijing-based quality analyst, she gave only her surname as she's embarrassed by how much money she spends playing mobile games on WeChat, a hugely popular messaging app developed by Chinese internet giant Tencent Holdings Ltd.

"The most expensive time was when I spent 68 yuan ($11.08) on a leopard on Tiantiankupao," said Deng, an avid iPhone user, referring to Tencent's hit game - called Timi Run Everyday in English - where characters run through obstacle courses. Having a leopard as a pet gives the characters extra power, helping players beat their friends.

Deng and tens of millions like her have made China Apple's third-largest market for software sales, and a huge chunk of that comes through WeChat. Known locally as Weixin, WeChat had 438 million monthly active users globally, mostly in China, at the end of June, and has rapidly evolved from a messaging tool into a digital Swiss Army knife, allowing users to send messages, play games, book taxis and shop online.

The app has proved a winning formula in getting people in China, a market notorious for not paying for software, to connect their bank accounts with their phones and pay for virtual goods like extra lives and power-ups in mobile games.

Apple takes a 30 percent cut on all sales.

"We're seeing some substantial strength there," Apple CEO Tim Cook said of China in a July earnings call. "The thing that's actually growing the most is the iTunes, Software and Services category, which has the App Store in it. That area is almost doubling year over year."

Apple's Greater China revenues, which include Hong Kong and Taiwan, soared 28 percent in April-June from a year earlier to $5.9 billion, and globally, iTunes, Software and Services sales were the company's second-fastest growing product category, up 12 percent year-on-year to $4.5 billion.   Continued...

 
A WeChat app icon is pictured in Beijing, in this December 5, 2013 file picture illustration.    REUTERS/Petar Kujundzic