Apple slashes prices in China to combat Huawei and local competition

US consumer electronics giant Apple is offering Chinese consumers discounts of up to 800 yuan (US$113) on a range of products, from iPhones to MacBooks, in a move to fend off intensifying competition from local rivals such as Huawei Technologies ahead of the Lunar New Year.

In a sales promotion covering iPhones, iPads, MacBook Air laptops, the Apple Watch and AirPods, which will run until the end of the coming weekend, consumers can receive up to 500 yuan off from the 13 model up to the latest 15 version, while the subsidy for MacBook Air is up to 800 yuan, according to the firm’s mainland China website.

The sale, coming several weeks ahead of the Lunar New Year, the most important annual festival for Chinese people, is expected to boost revenue for Apple amid increasing competition from local players, according to Ivan Lam, senior analyst at market consultancy Counterpoint Research.

Lam said the timing of Apple’s price cuts in China would take advantage of the typical consumer spending surge around the Lunar New Year.

“The strategic price adjustment will cancel out competitive pressure but will also boost sales growth, especially around the Lunar New Year season,” Lam said in a research note on Monday, adding that the move will also help Apple clear out older models from its inventory.

Apple has been facing mounting competitive pressure from Chinese rivals, especially Huawei, as they inch towards the premium smartphone segment once ruled over by the Cupertino, California-based company, according to Lam.

Chinese smartphone brands have rolled out a series of middle to high-end devices over the last few months, many of which are competitively priced from 3,999 yuan, and equipped with functions that rival higher-priced phones, he noted.

These models, representing efforts made by Chinese vendors to vie for the premium smartphone segment, are posing challenges to Apple’s older iPhone models as well as the basic versions of its new iPhone 15 line.

Total 2023 sales volume for the iPhone in mainland China dropped 3 per cent year on year, which translated to a 0.4 per cent decline in Apple’s market share, according to equity research firm Jefferies.

Jefferies estimated that Huawei saw its mainland market share in the December quarter gain 2 per cent from the previous quarter, and 6 per cent year on year. South China Morning Post