Apple has decided to offer rare discounts on its latest iPhone in China, in response to growing competition from local players like Huawei and Xiaomi. Apple faces challenges in maintaining its market share in the world’s largest smartphone market, where its iPhone 15 series has underperformed compared to previous models.

iPhone discount by $70 in China

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Between January 18 and January 21, Apple is rolling out discounts of up to 500 yuan (approximately $70) on its iPhone 15 range, including the premium iPhone 15 Pro Max.

This limited-time promotion, with the upcoming Lunar New Year, is a departure from Apple’s usual pricing strategy in China.

While third-party retailers often offer discounts during holiday periods, it is rare for Apple to implement such markdowns on its own retail channels.

Firstly, the iPhone 15 series faced a challenging market entry, with data from Counterpoint Research showing a continuous decline in Apple shipments since Q4 2022.

Market share that was traditionally held by Apple is now being captured by local brands, especially Huawei and Honor.

The competitor in this space is Huawei, which has given tough competition with its advanced Huawei Mate 60 featuring a 7-nanometer processor.

The Mate 60’s technological has garnered attention and praise, a challenge to Apple’s iPhone lineup. The buzz surrounding Huawei’s flagship device has influenced consumer preferences and contributed to Apple’s declining sales.

Chinese consumers have not been as enthused by Apple’s newest iPhone, making the tech giant to take a step, offering a discount on its flagship product.

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The limited-time promotion, set to run from January 18 to 21, features price cuts of up to 500 yuan (approximately $70) on the iPhone 15 series, including the premium iPhone 15 Pro Max.

The decision comes as Apple faces competition from Chinese rivals, with data from Counterpoint Research ahowing a decline in Apple shipments since Q4 2022.

Local brands like Huawei and Honor have gained market share, challenges to Apple, particularly in the mid-to-high range segment.

The Huawei Mate 60, with its advanced 7-nanometer processor, has garnered attention and contributed to Apple’s struggle in the Chinese market.

As Apple had initiated a similar promotion in January 2023, offering discounts on the iPhone 14 in response to a year-long slump in smartphone demand.

Smartphone shipments in China had experienced a 13.2% decline in 2022, the first time in a decade that the figures fell below 300 million, according to IDC.

The iPhone 15, released just a month prior, already saw discounts from retailers on Chinese e-commerce platforms ahead of the popular Singles Day shopping festival on November 11.

Apple’s share in the market has been challenged by Huawei, not only in the premium segment but also across the mid-high range.

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Analysts at Jefferies estimate a 30% decline in iPhone sales in China during the first week of January 2024. The Chinese government’s encouragement of using local brands, with restrictions on foreign devices in some companies and government departments, has contributed to Apple’s sales challenges in the region.

Apple’s net sales in China for 2023, ending September 30, a 2% decrease from the previous year. China, along with the United States, remained one of the two countries contributing more than 10% to Apple’s net sales in 2021, 2022, and 2023.

Apple is discounting its iPhones but also extending the price cuts to other products, including a rare $112 discount on the MacBook Air. This is a strategy to boost overall sales and maintain its market presence amid increasing competition.

Chinese consumers, driven by patriotism, seem to be favoring local brands, with Huawei’s Mate 60 gaining traction and receiving positive coverage from state media.

The shift in consumer preferences, with competitive pricing and feature-rich offerings from local competitors, has put pressure on Apple to adapt its pricing strategy.

Market analysts, including Will Wong from IDC and Ivan Lam from Counterpoint Research, address that Apple’s share in China is facing challenges not only from Huawei in the premium segment but also from other Chinese competitors in the mid-to-high range.

The pricing strategy adopted by these local players, starting at around 3,999 RMB, has resonated well with consumers.

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