Apple Launches Unprecedented iPhone Discounts in China Amid Local Competition

Apple's rare discount initiative in China, providing up to 500 yuan off select iPhone models, signifies the company's response to increasing competition from local smartphone manufacturers such as Huawei. The promotional offer, coinciding with the Lunar New Year, showcases a shift in Apple's strategy to cater to the changing consumer behavior amidst economic challenges in China.

Amid a backdrop of heightened competition from local smartphone manufacturers, US tech giant Apple is making headlines for its rare discounts on iPhones in China. Starting Saturday, January 4, the company will roll out a four-day promotion that offers discounts of up to 500 yuan (approximately $68.50 or £55.30) on select newer models of its flagship handsets.

The promotional pricing comes in response to increased competition from Chinese rivals, particularly Huawei, which has also implemented price cuts of up to 20% on its high-end devices. Additionally, the move reflects consumer hesitation to spend due to ongoing economic challenges in China, prompting Apple to take action to maintain its market position.

The discounts cover a range of Apple models, including its top-performing iPhone 16 Pro, originally priced at 7,999 yuan, and the pricier iPhone 16 Pro Max, currently retailing at 9,999 yuan. This promotional event mirrors a similar discount push by Apple last year preceding the Lunar New Year, which falls at the end of January this year.

Industry observers note a significant shift in consumer shopping behavior. "Apple's strategy has changed to adapt to the changes in Chinese consumers' shopping behavior," stated Will Wong, a senior research manager at International Data Corporation (IDC). "The value-seeking trend has made price discounts more attractive to consumers. Apple may fall behind other competitors if it doesn't adopt such a pricing strategy."

This trend of discounts is not isolated to smartphones but is reflective of a broader push across multiple sectors in China, with retailers and car manufacturers also introducing deals to draw in consumers amid a slowing economy.

Apple's market share in China is under scrutiny as local companies, like Vivo and Xiaomi, continue to gain ground. According to IDC’s latest research, Vivo was the leading smartphone seller in China in the third quarter of 2024, with a sales increase of over 20%. Comparatively, Apple experienced a minor sales decline of 0.3% during the same period, while Huawei reported a remarkable 40% increase in sales.

Commenting on the competitive landscape, Ivan Lam, a senior analyst at Counterpoint Research, remarked, "We've seen market competition increase with almost everyone launching a flagship last quarter." Despite facing US restrictions, Huawei has made a noteworthy comeback in the premium smartphone sector since launching several highly-anticipated devices last August.