What a HEIC file actually is
HEIC is a HEIF container holding HEVC-compressed stills. It stores roughly the same visible quality as JPEG in about half the space, and it can hold extras a JPEG cannot: depth maps, edit history, and the paired frames behind Live Photos.
Every iPhone since iOS 11 in 2017 shoots HEIC by default. Files reach other people through AirDrop, direct copies off the device, or an iCloud download that skips Apple's automatic conversion — which is why the problem usually appears at the moment of sharing.
What you get from ICO
ICO is a container that holds one or more small square images, with transparency, for use as an icon. It caps out at 256×256 — anything larger has to be scaled down, and the format is not intended for general pictures.
Every browser requests /favicon.ico by default, with no HTML required, and Windows uses ICO for application and shortcut icons. It is a narrow format that is completely reliable inside its niche.
What changes when you convert HEIC to ICO
An icon is being built here, not a picture converted. The HEIC is decoded, scaled to fit within 256×256 and stored losslessly inside the ICO container — so whatever compression artifacts the original carried are preserved faithfully, then shrunk to the point where nobody will ever see them. Detail is lost to the scaling, which is the intended outcome.
There is no transparency to preserve — HEIC files do not carry an alpha channel, so every pixel is opaque to begin with. Converting to a format that supports transparency does not create any; it only means you could add it later in an editor.
ICO cannot exceed 256×256, so anything larger is scaled down to fit while keeping its aspect ratio. Work from a square source if you can — a wide image gets letterboxed into the square, and fine detail disappears entirely at the 16-pixel size a browser tab actually renders.
Starting from an iPhone photo means starting from a rectangle, usually 4:3, so expect substantial cropping into the square. Photographs also make poor icons in general: at 16 pixels a face or a scene reduces to indistinct colour, where a simple mark stays recognisable.
Going from HEIC to ICO keeps you in modern-codec territory rather than falling back to JPEG, so file sizes stay closer to what the iPhone produced. The trade is where the result can be used: HEIC fails almost everywhere outside Apple, and ICO succeeds almost everywhere inside a browser — but neither is a safe bet for someone else's desktop software, which is what JPG is for.