Apple (AAPL.O) is offering rare discounts on its iPhones in China, cutting retail prices by as much as 500 yuan ($70) amid growing competitive pressure in the world’s biggest smartphone market.
The U.S. tech giant cut prices of some iPhones by 5%, its Chinese website showed on Monday. The time-limited promotion, branded as a Lunar New Year event, will last from Jan. 18 through Jan. 21 in a lead-up to the holiday in mid-February.
Sales of Apple’s latest iPhone 15 series of handsets have been far worse than previous models in China.
Home-grown rivals such as Huawei Technologies (HWT.UL) and Xiaomi (1810.HK) offer competitive models, while sources have said some companies and government departments have been limiting staffers’ use of Apple devices – mirroring U.S. government restrictions of Chinese apps on security grounds.
Chinese iPhone sales dropped 30% in the first week of 2024 versus the same period a year earlier, Jefferies analysts said in a client note, having fallen 3% for all of 2023. Analysts expect the competitive landscape to get tougher this year.
Apple has not cut prices for its latest iPhones in years. The cuts come after it surprised the market by not raising prices for the iPhone 15 series at its September launch.
Online shopping platforms including Pinduoduo have been slashing prices of the iPhone 15 and iPhone 15 Pro by as much as 16% since the beginning of the year.
Nicole Peng, senior vice president of market research firm Canalys, said the discounts did not come as a surprise as Apple is under pressure to boost sales globally, and especially in China, amid intensifying competition and Apple fans’ growing reluctance to upgrade.
“It is clear that Huawei is making a comeback,” Peng said, “Some Chinese consumers may return to using Huawei as driven by patriotism.”
Canalys expects Apple sales this year to stay flat worldwide while suffering a slight decline in China.
Apple did not respond to a request for comment.
FAQs
Why is Apple offering discounts on its iPhones in China?
Apple is offering discounts on its iPhones in China in an effort to boost sales amid growing competitive pressure from home-grown rivals such as Huawei Technologies and Xiaomi.
How much are Apple’s iPhones being discounted in China?
Apple is cutting prices of some iPhones by 5%, its Chinese website showed on Monday. The time-limited promotion, branded as a Lunar New Year event, will last from Jan. 18 through Jan. 21 in a lead-up to the holiday in mid-February.
How are Apple’s sales doing in China?
Chinese iPhone sales dropped 30% in the first week of 2024 versus the same period a year earlier, Jefferies analysts said in a client note, having fallen 3% for all of 2023. Analysts expect the competitive landscape to get tougher this year.
Is Apple planning to cut prices on its iPhones in other markets?
Apple has not announced any plans to cut prices on its iPhones in other markets. However, it is possible that the company may consider doing so in the future if it faces similar competitive pressures in other countries.
Conclusion:
Apple’s decision to offer discounts on its iPhones in China is a sign that the company is facing growing competitive pressure in the world’s biggest smartphone market. It remains to be seen whether the discounts will be enough to boost sales of Apple’s latest iPhones, but it is clear that the company is taking steps to address the challenges it is facing in China.”
