Why Apple is Offering Rare iPhone Discounts in China

The Chinese market is witnessing something unusual as Apple is offering discounts on iPhones. This initiative comes amid rising competition from local brands, notably Huawei. Starting on January 4th, shoppers will have the chance to grab discounts of up to 500 yuan (approximately $68.50) on several of Apple's latest models.

In a similar vein, Huawei has also reduced prices on its high-end smartphones by as much as 20%. The current economic climate in China has made consumers more cautious about spending, prompting this price-cutting strategy from both tech giants.

The special discounts not only include Apple's premier models, like the iPhone 16 Pro and iPhone 16 Pro Max, but also extend to older versions and other devices. For context, the flagship iPhone 16 Pro's original price is 7,999 yuan, while the iPhone 16 Pro Max has a starting price of 9,999 yuan. Thus, the biggest discount of 500 yuan marks a notable reduction in their prices.

This promotional period is particularly strategic as it precedes the Lunar New Year holiday, which kicks off at the end of January. Last year, Apple implemented a similar promotion during this festive time, indicative of their adaptive marketing approach to local consumer behavior.

Changing Consumer Behavior

According to Will Wong, a senior research manager with the International Data Corporation (IDC), Apple is adjusting its strategies to better align with current trends among Chinese consumers. There is a notable shift toward value-seeking behaviors, making price discounts more appealing than before. If Apple does not adapt its pricing strategy, it risks falling behind competitors.

This trend of offering discounts is not limited to Apple or Huawei; it reflects a broader move among various Chinese industries. From online retail platforms to automotive manufacturers, many are introducing deals to entice customers who are currently hesitant to make purchases due to a slowing economy.

Additionally, to stimulate consumer spending, the government introduced a trade-in program aimed at encouraging buyers to upgrade their old products, which was recently expanded to include mobile phones, tablets, and other electronic devices.

Rising Local Competition

Apple is facing intensified competition in the Chinese smartphone market, particularly from brands like Vivo and Xiaomi. After a period of declining sales, Apple re-entered the top five smartphone manufacturers in the country for the third quarter of 2024. Recent data from IDC indicates that Vivo led the market, boasting a sales increase of over 20%, while Apple experienced a slight decline in sales of 0.3%. In contrast, Huawei's sales surged more than 40%, particularly after its re-entry into the premium smartphone sector.

Ivan Lam, a senior analyst at Counterpoint Research, noted that the competition has intensified, with nearly all companies introducing flagship models during the last quarter. Huawei, in particular, has seen strong demand as it launched several new devices that incorporate advanced technology, despite facing challenges from US regulations.

Apple, Huawei, Discounts