Apple (AAPL.O) has initiated uncommon price reductions on its iPhone lineup in China, with retail prices marked down by up to 500 yuan ($70) in response to escalating competitive pressures within the world’s largest smartphone market.
As evidenced by Apple’s Chinese website on Monday, the U.S. tech giant has implemented a 5% reduction on select iPhone models. This time-limited promotional effort, presented as a Lunar New Year event, is scheduled to run from January 18 through January 21, leading up to the mid-February holiday.
Contrary to prior models, sales of Apple’s latest iPhone 15 series have experienced a notable decline in China. Homegrown competitors like Huawei Technologies (HWT.UL) and Xiaomi (1810.HK) are offering compelling alternatives. Additionally, reports indicate that some companies and government entities have restricted the usage of Apple devices among their staff, mirroring U.S. government measures limiting Chinese apps on security grounds.
Jefferies analysts highlighted a 30% drop in Chinese iPhone sales during the first week of 2024 compared to the same period in the previous year. The decline for the entirety of 2023 was 3%, and industry experts anticipate heightened competition in the coming year.
Apple, which had refrained from adjusting prices for its latest iPhones for several years, surprised the market by maintaining prices for the iPhone 15 series during its September launch. The current price reductions reflect a strategic shift. Online platforms such as Pinduoduo have been offering substantial discounts of up to 16% on the iPhone 15 and iPhone 15 Pro since the beginning of the year.
Nicole Peng, Senior Vice President of the market research firm Canalys, remarked that these discounts were anticipated, considering Apple’s global imperative to boost sales, particularly in China. This move comes amid increasing competition and a growing reluctance among Apple enthusiasts to upgrade their devices.