Apple responds to market pressures with rare discounts on iPhones in China

Apple, often seeming invincible in the consumer tech space, is showing rare first signs of succumbing to market challenges. In the Chinese market, to boost demand for its flagship devices, including the iPhone 13 and the iPhone 15 Pro Max, the company is offering discounts for the first time in several years. In the four-day promotion leading up to the Lunar New Year shopping season, customers can save up to 500 yuan (about $70), which represents around a 5% discount.

In China, local brands like Huawei Technologies are gaining preference, and state-backed agencies and firms are increasingly discouraging the use of foreign devices. The intense competition from domestic alternatives, coupled with restrictions on Apple devices in some government circles, has intensified pressure on the American tech giant.

Jeffries has already predicted Apple’s iPhone sales in China could drop by 30% in 2023 due to the success of Huawei’s Mate 60 series, which features a 7-nanometer made-in-China processor. The “Chinese national achievement” has gained widespread recognition and can be seen as the root of the challenges faced by Apple in maintaining its market share in China. Reports suggest that the latest iPhone 15 series faced lacklustre sales in China, with a 30% decline in the first week of 2024, following a 3% drop throughout 2023.

The company’s global sales are expected to remain relatively unchanged in 2024, but the unique challenges faced by Apple in China, where patriotic consumers are increasingly opting for domestic alternatives amid rising geopolitical tensions, seem to be causing the company to adopt new strategies to maintain its position in the market.

Apple’s discount extends beyond iPhones to include products like the MacBook Air, most iPad models, some AirPods, and the Apple Watch. The company’s Chinese retail partners have previously offered steeper discounts on iPhones, but this is the first time in years that Apple has cut prices on its newest iPhones.