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Apple offers discounts as market heats up

4-day promotion expected to stabilize tech giant's sales in Chinese mainland

By CHENG YU | China Daily | Updated: 2024-01-17 09:21
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A view of Apple Inc's flagship store in Hangzhou, Zhejiang province. LONG WEI/FOR CHINA DAILY

US technology giant Apple Inc will offer a rare discount of up to 800 yuan ($114) for Chinese mainland consumers on its latest series of products from Thursday to Sunday.

Industry experts interpreted Apple's discount as a strategy to boost sales in the lead-up to the Lunar New Year holiday in the first half of February, one of China's most important festivals and a peak consumption period.

Any sales spike could help Apple grab a larger share of China's consumer tech market that is marked by increasingly fierce competition.

Apple's sales promotion spans iPhones, iPads, MacBook Air laptops and AirPods. The discount on its latest iPhone 15 is 500 yuan, or about 8 percent of the listed price, while that on the MacBook Air is up to 800 yuan, or about 10 percent off.

"Apple had already adjusted prices of its iPhone 15 series in multiple channels like e-commerce platforms. It's for the first time in years that Apple is (directly) offering a discount at the beginning of a year," said Guo Tianxiang, senior analyst from market consultancy IDC China.

Ivan Lam, senior analyst at market consultancy Counterpoint Research, wrote in a note: "The strategic price adjustment will cancel out competitive pressure but will also boost sales growth, especially around the Lunar New Year season. The move will also help Apple clear out older models from its inventory."

In China, Apple is facing heightened competition from domestic tech companies, including Huawei Technologies and Xiaomi Corp. Huawei launched its Mate 60 series of phones in August.

The Mate 60 series is widely regarded as the Chinese smartphone maker's comeback to the high-end smartphone market amid geopolitical tensions.

According to a research note of brokerage Jefferies, in the first week of this year, Apple's iPhone sales in China dropped by 30 percent year-on-year, but its competitors such as Xiaomi and Huawei remained much stronger with sales that remained flat.

There have been aggressive discounts on multiple iPhone models on major Chinese online marketplaces. For instance, the latest iPhone 15 Pro and iPhone 15 Pro Max retailed at a 16 percent discount on e-commerce platform Pinduoduo in the first week of this year, the note said.

Jefferies analysts also said they believe Apple's iPhone sales will fall by double digits this year in China and expect the US tech giant to face even higher revenue pressure in the Chinese market this year.

IDC said it believes China, the world's largest smartphone market, is expected to see its smartphone shipments soar 3.6 percent year-on-year to 287 million units this year, which would mark the market's first year-on-year growth.

With an expected sales recovery, various brands, be it Huawei or Apple, will eventually rely on product quality and features to win market share, said Xiang Ligang, director-general of the Information Consumption Alliance.

"In recent years, Apple has made modest strides in product innovation. After Huawei's breakthrough comeback, the Chinese firm will gain a more active position in the market," he said.

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