Demand Hell? Apple Slashes iPhone Prices In China Ahead Of Major Online Shopping Event

Apple is slashing prices of its iPhones in China as the country’s economy works to re-open after the coronavirus lockdown. The price cuts come ahead of the country’s online shopping festival called 6.18. 

Apple announced early this week that the price cuts would go into effect on major online sales channels like Alibaba and JD.com, as well as on Apple’s official store, according to CNBC. 

Right now, on Alibaba’s Tmall, you can buy an iPhone 11 64GB model for 4,779 yuan ($669.59), down about 13% from its original 5,499 yuan price. The iPhone 11 Pro has also been marked down to 7,579 yuan from 8,699 yuan and the iPhone Pro Max is listed for 8,359 yuan, down from its original price of 9,599 yuan. The iPhone SE now costs 3,099 yuan, down from 3,299 yuan.

JD.com is showing even more discounts. The iPhone 11 64GB, for instance, is 4,599 yuan, and the iPhone 11 Pro is 6,999 yuan. The iPhone Pro Max is approaching a discount of 21% on JD.com. JD.com says they are going to be doing discounts “every day” during the shopping festival.

It also appears as though the discounts are working. JD.com says that transaction volume in the first hour of sales on June 1 was three times that of the same period last year.

Discounts get even deeper with some other Chinese retailers, showing how competitive the environment for sales has become as the country’s economy attempts to recover. June 18 is expected to be very similar to Singles Day, with sales taking place over more than just one day, as sellers fight for access to consumers’ wallets. 

The discounts could be signaling that demand for Apple products is drying up in the country. The move belies Apple’s usual habit of keeping tight control over its prices among third party sellers and this is only the second time the company has participated in the 6.18 online shopping event. 

Will Wong, a research manager at IDC, told CNBC: “Last year when they did it the reception was good and they had a good result by giving discounts and promotions. This year, we see it as good timing during this post-lockdown season because people are very careful (about spending) and discounts will stimulate demand.”

But the consumer may not be ready to shell out, even for discounted high end models. 

Nicole Peng, vice president of mobility at Canalys, concluded: “The cheaper iPhones are actually attracting quite a lot of attention these days. They are trying to target the older generation iPhone install base for example (those on a) iPhone 6, iPhone 7 and iPhone 8. They don’t want to spend much more compared to what they previously spent, but they will need a device upgrade.”