In a strategic move to bolster sales in a fiercely competitive market, Apple has introduced substantial discounts on its iPhones in China as the country’s prominent 618 shopping festival kicks off. Facing intense rivalry from local brands like Huawei, Apple is slashing prices significantly on various models.
Major Chinese e-commerce platforms JD.com and Alibaba’s Tmall have started offering select iPhone models at discounts as high as 20% since the 618 festival promotions began on Monday. Notably, the 256-gigabyte iPhone 15 Pro Max is now selling for 7,949 yuan (US$1,120), down from its original price of 9,999 yuan. This discount surpasses those seen in Apple’s February sales campaigns.
The 618 shopping festival, one of China’s largest e-commerce events, features two main sales periods this year: from May 20 to May 28, and from May 31 to June 20, according to a statement from Alibaba. Apple is utilizing these platforms to drive sales, offering additional discounts up to 6,100 yuan on the iPhone 15 for customers trading in iPhone 11 or newer models.
Apple is also offering discounts of up to 6,100 yuan on the iPhone 15 when Chinese buyers trade in iPhone 11 or later versions, according to the company’s website.
While the promotions coincide with the shopping festival, the steep discounts are also likely tied to slowing iPhone sales, Le Xuan Cheiw, an analyst at technology market research firm Canalys, told CNBC.
“Apple’s second price cut in 2024, following the first in February, aims to boost sales and counteract Huawei’s resurgence,” he said, noting that earlier cuts had boosted sales momentum.
The company has been experiencing headwinds in China, one of its largest markets, since Chinese telecoms company Huawei launched new smartphone models late last year, utilizing advanced chips, which the U.S. had sought to restrict the company from gaining access to.
In the first three months of this year, Apple experienced a 25% year over year decline in sales in China, with its market share dropping from 20% to 15% over the same period, according to data from Canalys.
Meanwhile, last month, Huawei introduced another challenger to the iPhone with a new series of high-end smartphones, the Pura 70.
However, despite the struggles in China and a 10% decline in global iPhone sales in the March quarter, the company has managed to maintain investor confidence following an earnings beat and massive stock buyback earlier this month.
Apple also expanded its gross profit margin by 46.6% in the quarter, thanks in large part to its growing services business, with the company signaling revenue growth in the current quarter.
Source: CNBC
