Apple's Price Cuts in China Counter Rival Pressure, Analysts Say
Apple, the US consumer electronics giant, is offering Chinese consumers significant discounts on a range of products, including iPhones and MacBooks, in a bid to fend off competition from local rivals such as Huawei Technologies.
The sales promotion, which will run until the end of the week, offers discounts of up to 800 yuan (US$113) on various Apple products. This move comes ahead of the Lunar New Year, a crucial festival for Chinese people.
The discounts apply to iPhones, iPads, MacBook Air laptops, Apple Watch, and AirPods. Consumers can receive up to 500 yuan off the 13 model up to the latest 15 version, while the subsidy for MacBook Air is up to 800 yuan, according to Apple's mainland China website.
Analysts believe that this sales promotion will help boost Apple's revenue in the face of increasing competition from local players. Ivan Lam, a senior analyst at market consultancy Counterpoint Research, stated that the timing of Apple's price cuts in China takes advantage of the typical surge in consumer spending around the Lunar New Year. Lam also noted that the strategic price adjustment will not only counter competitive pressure but also drive sales growth, particularly during the festive season.
Furthermore, the price cuts will assist Apple in clearing out older models from its inventory. Lam highlighted that Apple has been facing mounting competitive pressure from Chinese rivals, particularly Huawei, as they make strides in the premium smartphone segment that was once dominated by Apple. Chinese smartphone brands have been introducing middle to high-end devices at competitive prices, posing challenges to Apple's older iPhone models and basic versions of its new iPhone 15 line.
According to equity research firm Jefferies, the total sales volume for the iPhone in mainland China dropped by 3% in 2023 compared to the previous year, resulting in a 0.4% decline in Apple's market share. Jefferies also estimated that Huawei's market share in mainland China increased by 2% in the December quarter compared to the previous quarter and by 6% year on year.
Apple offers discounts of up to 800 yuan on iPhones and MacBooks in China.
The sales promotion is timed to coincide with the Lunar New Year.
Analysts believe the price cuts will help Apple counter competition from local rivals.
Source: SCMP