Apple iPhone sales in China continue to slump as resellers mark down prices
Sales of the iPhone 15 were down by 30% in the first week of 2024, compared to the previous year.
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The backstory: Apple is the second-largest company in the world (by market cap), with China being its third-largest market after the US and Europe. While it produces most of its products in China, Apple has faced challenges in the country lately with sales of its latest iPhone. There seems to be a growing preference for phones from China's own mobile giant, Huawei, and authorities also reportedly directed government workers not to use iPhones at work last year.
Sales of the iPhone 15 were down by 30% in the first week of 2024, compared to the previous year, with an overall 3% sales drop for all of 2023, according to Jefferies analysts. China's economy has also been in a bit of a slump recently, with people having to cut down on their spending. On top of this, tensions have ramped up between the US and China, with both countries restricting access to important components needed to advance tech production.
More recently: In January, ahead of the Lunar New Year, Apple offered discounts on iPhones in China of up to 500 yuan (US$70), around 5% off the regular prices, in an effort to boost sales. Despite this move, Apple didn't see growth in sales in China; instead, it saw a 13% drop last year.
The development: Resellers of Apple products in China are now slashing prices of the iPhone 15 models by up to 1,300 yuan (US$180), showing that sales are not improving for Apple in its China market. But, Apple stores still have the iPhone 15 at its original price. Apple sales dropped 13% in the quarter ending in December, which was much more than analysts had predicted and the weakest numbers the tech giant had seen in China for that period in years.
Key comments:
"Apple is catching up with the 'deflation' trend in China, intending to boost the demand for iPhones," IDC analyst Will Wong said. "Based on IDC's preliminary January data, the pressure was mainly coming from other Android vendors as we saw Apple decline by around 10% year-on-year in the month while Huawei grew triple-digits over the same period."
"Apple is offering a short-term promotional price to third-party channels as an early promotion for International Women's Day," said Ivan Lam of Counterpoint Research. "We observed that iPhone sales in the Chinese market are becoming increasingly dependent on promotions."
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