Apple offers rare discounts on its iPhones in China, cutting retail prices by as much as 500 yuan ($70) amid competitive pressure in the world’s biggest smartphone market. The US 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 January 18 through January 21 in a lead-up to the holiday in mid-February. The current iPhone 15 series sales have been far lower in China than previous versions, reflecting rising competition from domestic rivals and reluctance among consumers to upgrade.
Online shopping platforms, including Pinduoduo, have been slashing iPhone 15 and 16 models by as much as 16% since the start of the year. Nicole Peng, senior vice president of market research firm Canalys, said the discounts were not surprising as Apple is under pressure to boost sales globally, especially in China, where fiercer competition and reluctance by some fans to upgrade are taking their toll. She expects Apple sales to remain flat worldwide this year and experience a modest decline in China.
China’s iPhone market is already facing stiff challenges from domestic competitors like Huawei Technologies Co Ltd and Xiaomi Corp, as well as edicts banning foreign devices across many state-backed agencies and businesses. In addition, the coronavirus crisis triggered by a deadly outbreak in Zhengzhou, China’s second-largest city, has hampered demand for phones assembled at Foxconn Technology Group’s plants.
For its part, Apple is betting on its services business and wearables to drive growth in the next several years. But both areas depend on the underlying performance of its iPhones, which make up around half of Apple’s revenue.
The company also announced a boost in dividend payouts. It increased its share-repurchase program by $75 billion, showing it is ready to flex its financial muscle to reassure investors. But analysts were disappointed by the weak quarterly results, which Apple blamed on lower-than-expected demand for the latest iPhones.
In a memo to staff, chief executive Tim Cook said the company had “failed to meet our customers’ expectations” for the quarter, which ended in December. The Cupertino, California-based company reported a profit of $12 billion, down from the $13.1 billion it reported in the same period a year earlier. Its sales slipped by 4.5%, the first drop in over two years.
Jim Pollard has been a journalist for News Ltd papers in Sydney and London and worked through SE Asia in the late 90s. He has been based in Bangkok since 1999. He writes on business, culture, and the broader region for The Daily Star. Follow him on Twitter @JimPollard.
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