By providing infrequent discounts on its iPhones, Apple is upending the Chinese smartphone industry. In response to the fierce competition it confronts in the largest smartphone market in the world, the tech giant has chosen to lower retail pricing by as much as 5%, or 500 yuan ($70).
Chinese New Year Occasion
Cleverly dubbed a Lunar New Year event, this short-lived campaign is slated to take place from January 18 to January 21, coinciding with the mid-February holiday. However, sales of Apple’s most recent iPhone 15 series have fallen well short of its predecessors in China.
A primary cause of this downturn is the fierce rivalry between domestic competitors like Xiaomi and Huawei Technologies. Chinese customers are increasingly drawn to these enterprises because they provide attractive substitutes. Furthermore, there have been rumours circulating that certain businesses and government agencies are limiting the usage of Apple devices by their employees, mirroring the US government’s security-related ban on Chinese applications.
Obstacles with the iPhone 15 Series
Analysts report that, in the first week of 2024, Chinese sales of iPhones fell precipitously by 30% as compared to the same period the year before. This comes after a 3% drop in revenue for the entire year 2023. According to analysts, Apple faces an even more difficult competitive environment in the upcoming year.
Since Apple hasn’t lowered the price of its most recent iPhone models in years, this decision is especially notable. Given that Apple declined to increase the price of the iPhone 15 series at its September debut, the choice to give discounts seems unexpected.
Pervasive Price Reductions
Pinduoduo and other online retailers have also joined the price-cutting trend, with the iPhone 15 and iPhone 15 Pro now costing up to 16% less than they did at the start of the year. This points to a wider trend in the industry, as different merchants are lowering their pricing to draw in budget-conscious customers.
According to Nicole Peng, senior vice president of a market research organisation, Apple decided to give discounts in response to demand from around the world to increase sales, especially in China. She notes that a sense of patriotism among Chinese customers is driving Huawei’s resurgence.
This year, experts estimate Apple’s sales to be flat globally, with a modest dip anticipated in China. In the face of growing competition, it is unclear if these price reductions would be sufficient to rekindle Chinese customers’ passion for Apple’s iPhones.
