Apple is offering hefty discounts on iPhones in China in a bid to boost sales amid intense competition from local brands such as Huawei, as promotions for the country’s 618 shopping festival get underway.
Chinese e-commerce marketplaces JD.com and Alibaba’s Tmall have been selling select iPhone models at discounts as high as 20% since promotions for 618 festival started on Monday.
Apple’s 256-gigabyte iPhone 15 Pro Max was being sold for 7,949 yuan (US$1,120), down from the original 9,999 yuan, a significantly higher discount than those reported in February.
Tmall and JD.com are some of Apple’s sales channels in the country that regularly promote discounts during the mid-year 618 shopping festival.
According to a statement from Alibaba, this year’s event will include two sales periods from May 20 to May 28, and from May 31 to June 20.
Apple is also offering discounts of up to 6,100 yuan on the iPhone 15 when Chinese buyers trade in iPhone 11 or later versions, according to the company’s website.
While the promotions coincide with the shopping festival, the steep discounts are also likely tied to slowing iPhone sales, Le Xuan Cheiw, an analyst at technology market research firm Canalys, told CNBC.
“Apple’s second price cut in 2024, following the first in February, aims to boost sales and counteract Huawei’s resurgence,” he said, noting that earlier cuts had boosted sales momentum.
The company has been experiencing headwinds in China, one of its largest markets, since Chinese telecoms company Huawei launched new smartphone models late last year, utilizing advanced chips, which the U.S. had sought to restrict the company from gaining access to.
In the first three months of this year, Apple experienced a 25% year over year decline in sales in China, with its market share dropping from 20% to 15% over the same period, according to data from Canalys.
Meanwhile, last month, Huawei introduced another challenger to the iPhone with a new series of high-end smartphones, the Pura 70.
However, despite the struggles in China and a 10% decline in global iPhone sales in the March quarter, the company has managed to maintain investor confidence following an earnings beat and massive stock buyback earlier this month.
Apple also expanded its gross profit margin by 46.6% in the quarter, thanks in large part to its growing services business, with the company signaling revenue growth in the current quarter.