Troubled Apple: Tech giant authorizes price cuts for iPhones

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01:55

It's not unusual for Chinese consumers to be bombarded with promotions during Chinese New Year. This year, that includes Apple which is offering discounts in China for the first time.

One Shenzhen resident said he was thinking about buying an iPhone as a Spring Festival gift for his wife when, to his surprise, he noticed that a local Suning store was offering much lower prices than on the Apple website. "The cheaper iPhone is a response to Chinese competitors. Local products have become better," the resident, a Mr Wang, said.

According to Fan Huaiwei, deputy regional manager at Sunning Shenzhen, Apple has adjusted prices for iPhones and two models have seen deeper cuts.

“One is the iPhone 8, which were priced at 5,099 yuan and now are 4,299 yuan. With our discounts, the price was reduced further to 3,999 yuan. The other one is the iPhone XR, which was 6,099 yuan and now is 5,299 yuan," Fan explained.

Major Chinese e-commerce companies, including JD.com and T-mall, have cut their iPhone prices. Some have even reduced the price of the iPhone XS and XS MAX.

An Apple store in Shanghai. /VCG Photo

Industry analysts say Apple adopted a new pricing strategy in face of its sinking market share. Market analyst firm Canalys reports that Apple's shipments to China dropped 13 percent in 2018, the third consecutive year of decline. Its market share remained in fifth place at nine percent. The top four mobile producers are all Chinese.

Zhang Jian, director of the quality management office at Xiaomi says the fact that four of the top six brands are Chinese means that Chinese smartphones have improved significantly in terms of quality.

"Another reason is that we, local companies, know our users better and understand what they need," he said. "Based on that, we have optimized our hardware and operational systems. That makes our products and services more competitive in the market and contributes to the surge of Chinese brands."