Apple has initiated a rare move by offering a direct discount of 500 yuan ($70) on its latest iPhone 15 models in China, available from January 18 to 21. This decision comes amidst concerns over a substantial 30% decline in iPhone sales in China over the past year. The company’s sales have faced challenges from local competition, particularly from brands like Huawei and Xiaomi, which offer premium Android-powered foldable phones. The discount is timed with the Lunar New Year holiday season, a major shopping period in China, indicating Apple’s effort to boost sales during this critical time.
China has historically been one of the most lucrative markets for Apple, driven by a deep affinity among Chinese consumers for premium products. However, the demand for iPhones in China appears to be waning, and local brands have been successful in attracting customers with competitive offerings. The lack of demand for iPhones in 2023 is attributed to factors such as the impact of sanctions on Huawei and the release of locally manufactured 5G chipsets, contributing to the decline in iPhone sales.
Apple’s struggle in the Chinese market is evident in the recent downgrade of its stock to underweight by Barclays due to low iPhone 15 sales in the country. The trend is expected to continue into 2024, even with the release of the iPhone 16. The company faces the challenge of retaining Chinese customers who are not merely switching to iPhones made by other companies but are actively leaving the Apple ecosystem for Android alternatives. The rarity of direct discounts on iPhones through official channels in China underscores the urgency for Apple to address its declining appeal in the market.
This move by Apple raises questions about the effectiveness of its current iPhone strategy in China. If discounts become more common, it could signal the company’s struggle to maintain its market share in this important region. As local competitors capitalize on the changing preferences of Chinese consumers, Apple may need to reconsider its approach and introduce more compelling offerings to regain and sustain interest in its iPhones.