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Apple Discounts iPhones in China to Fight Sales Slump

Apple is facing softening iPhone demand in China, the company’s second-biggest market after the US and the world’s biggest smartphone market.

Close-up photo of three iPhones
Photo by Denis Cherkashin via Unsplash

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Apple, king of disruption, has come up with a revolutionary new sales technique: charge less for its phones.

The last few weeks have seen reports of the unthinkable for Apple: softening iPhone demand in China, the company’s second-biggest market after the US and the biggest market globally for smartphone sales. Apple has reacted by offering a limited-time-only $70 discount ahead of the Lunar New Year, a rare move saved for truly dire times.

Go Your Own Huawei

Apple released its iPhone 15 models last September, and in China, the debut opened with more of a whimper. Over its first 17 days in the Chinese market, the iPhone 15 performed 4.5% worse than its ancestor the iPhone 14, according to Counterpoint Research. Things went from bad to worse, as Jeffries analysts found iPhone sales dropped 30% year-on-year in December.

Analysts’ best guess at why Chinese consumers suddenly seem less enamored of the iPhone is that domestic smartphone-maker Huawei, a target of US sanctions over recent years, has stolen Apple’s thunder:

  • Huawei brought out its new flagship phone the Mate 60 Pro in August, replete with a new kind of chip so powerful that the US started to question whether Huawei had somehow circumvented the US-China chip war.
  • According to Counterpoint Research, Huawei grew its China market share to 14% in last year’s Q3 from 11% in Q2. Meanwhile, Apple’s slice of the pie shrank to 15% from 16%.

Hands-on Headsets: While Apple tries to grease the wheels of iPhone commerce in China, getting your hands on its next product will be a surprisingly involved process. Apple’s new VR headset, the Vision Pro, goes on sale in just a few weeks, and the company is reportedly gearing up for an in-store demo lasting up to 25 minutes. Retail employees also need to select the correct accouterments for Vision Pro buyers, measuring their faces to determine what size foam cushions, headbands, and “light seals” to fit them with. Oh, and if you wear glasses, they’ll even scan them to learn your prescription.  You know, regular shopping stuff.