Apple has initiated rare discounts on its iPhones, reducing retail prices by up to 500 yuan ($70), in response to escalating competition in China’s smartphone market, Reuters news report said.
The U.S. tech giant has implemented a 5 percent price reduction on select iPhone models as part of a time-limited promotion branded as a Lunar New Year event. This promotional offer is set to run from January 18 to January 21, leading up to the mid-February holiday, Apple’s Chinese website indicated.
Sales of Apple’s latest iPhone 15 series have faced challenges in China, experiencing a decline compared to previous models. Local competitors like Huawei Technologies and Xiaomi have presented formidable alternatives.
Apple’s total sales in Greater China have touched $72.559 billion for 12-months ended on 30 September 2023. Apple’s fourth quarter sales in Greater China touched $15.084 billion.
Honor (11.8 million), Oppo (10.9 million), Apple (10.6 million), Vivo (10.4 million), Xiaomi (9.1 million) are the top five smartphone brands in China during the third quarter of 2023. The smartphone sales in China reached 66.7 million units in Q3 2023.
Canalys Research Analyst Lucas Zhong said in October: “The Huawei Mate 60 series launch sparked the market. If Huawei expands the new Kirin chipset into its low-to-mid-range portfolio in the future, it has the potential to disrupt the competitive dynamic among leading vendors.”
Furthermore, reports suggest that certain companies and government entities have curtailed the use of Apple devices among their staff, reflecting the U.S. government’s restrictions on Chinese apps due to security concerns.
According to Jefferies analysts, Chinese iPhone sales plunged by 30 percent in the first week of 2024 compared to the same period in the previous year. This follows a 3 percent decline in sales for the year 2023. Analysts anticipate increased competition in the market throughout the year.
Apple’s decision to lower prices comes after years of maintaining stable pricing for its latest iPhones. The move contrasts with the market’s expectations, given that Apple did not raise prices for the iPhone 15 series during its September launch.
Online platforms, including Pinduoduo, have also slashed prices for the iPhone 15 and iPhone 15 Pro by up to 16 percent since the start of the year.
Nicole Peng, Senior Vice President of market research firm Canalys, commented that these discounts were not surprising, considering Apple’s global imperative to boost sales, especially in China, amid rising competition and a growing reluctance among Apple fans to upgrade.
“It is clear that Huawei is making a comeback,” Peng remarked, noting that some Chinese consumers may return to using Huawei, driven by patriotic sentiments.
Canalys anticipates that Apple’s sales will remain flat worldwide this year while facing a slight decline in China. Apple has not responded to requests for comment on the price reductions.