Apple Offers Rare iPhone Discounts In China Amid Intensifying Huawei Competition

Apple struggled with selling iPhones in China in 2024 as rivals like Huawei and Xiaomi took away market share from the world’s most valuable company. As a result, Tim Cook has been pressured to offer “rare discounts” on iPhones in the world’s largest handset market. 

Reuters reports that discounts of up to 500 yuan ($68.50) are being offered in a four-day promotion for the flagship iPhone 16 Pro, running from Saturday through next Tuesday.

The four-day promotion, running from Jan. 4-7, applies to several iPhone models when purchased using specific payment methods, according to its website. The flagship iPhone 16 Pro with a starting price of 7,999 yuan and the iPhone 16 Pro Max with a starting price of 9,999 yuan will see the highest discount of 500 yuan. The iPhone 16 and iPhone 16 Plus will receive a 400 yuan reduction. -RTRS

Apple’s sales in China have been under pressure with increasing domestic competition. For a brief moment, Apple fell out of the top five smartphone vendors in the world’s second-largest economy in the second quarter of 2024. It did recover in the third quarter, yet sales did decline year-on-year.

Meanwhile, Huawei’s sales surged as the Chinese tech firm introduced new ‘made-in-China‘ smartphones featuring a new operating system and domestically produced chips to power the devices. Strong patriotic fervor in the country has also led to consumers ditching iPhones for domestic ones.  

Apple’s earnings in the fourth quarter beat revenue estimates, but sales in China missed and dropped year over year. China weakness is certainly showing up in earnings, hence why Cook has been forced to offer “rare discounts” on iPhones. 

Reuters added:

The Apple promotion also includes discounts of 200 to 300 yuan on older iPhone models, as well as other categories of products such as MacBook laptops and iPad tablets. Customers must use designated payment methods including WeChat Pay or Alipay to qualify for the discounts.

Gene Munster, managing partner at Deepwater Asset Management, described Apple’s China unit as “a disappointment in ’24, full stop.” 

It’s not just China. The whole AI-powered iPhone supercycle theme was a total bust elsewhere.  

Cook’s troubles could multiply as Trump’s tariff war with China complicates matters for the world’s most valuable company. 

Goldman’s Allen Chang and Verena Jeng recently noted that an increasing number of Chinese handset brands are releasing AI smartphones for the mid-end market for as low as $168.

We asked: “How Will Apple Compete With $168 AI Smartphones From China?”